Price Waterhouse fumes as Satyam files case
Satyam filed a suit against its former Board of Directors, some employees and Price Waterhouse seeking damages for perpetrating fraud.
New Delhi: Outraged over a case filed by Satyam against it, audit firm Price Waterhouse on Monday said it was an attempt to shift responsibility to auditors.
"Price Waterhouse India is outraged that Satyam is attempting to shift responsibility to auditors for the consequences of a carefully and deliberately concealed fraud that was undertaken at the direction of its own senior management," said a statement by the audit firm.
The firm was reacting to Satyam Computer Services having filed a suit in a Hyderabad court against its former Board of Directors, certain employees and Price Waterhouse seeking damages for perpetrating fraud.
Price Waterhouse further said, "The fraud perpetrated by Satyam was specifically designed to - and did - circumvent Satyam's own internal controls and Price Waterhouse India's audit process, and consequently Price Waterhouse India was a victim of Satyam's fraud, and will defend itself vigorously against Satyam's baseless contentions."
The firm also said that it has filed its own civil suit against Satyam and certain members of its former senior management claiming compensation and damages.
Satyam was taken over by the Mahindra group in 2009 and rechristened it as Mahindra Satyam, after its founder Ramalinga Raju admitted to an about Rs 14,000-crore accounting scam in 2009.
US regulator Securities Exchange Commission had in April, 2011 imposed a penalty of $ 17.5 billion jointly on Satyam Computers, PriceWaterhouse India and affiliates auditors for the accounts bungling that went undetected for several years.
Satyam agreed to pay a fine of $ 10 million towards settlement of charges of fraudulently "overstating the company's revenue, income and cash balances by more than $ 1 billion over five years".
SEC asked PriceWaterhouse India to pay $ 6 million in penalty for conducting "deficient audits of the company's financial statements and enabling a massive accounting fraud to go undetected for several years".
Other affiliates, Lovelock & Lewes and Price Waterhouse Bangalore agreed to pay the Public Company Accounting Oversight Board (PCAOB) a $ 1.5 million penalty for their violations of PCAOB rules and standards in relation to the Satyam audit engagement.