Satyam hires accounting firms to restate accounts
- 15 January, 2009 08:00
The board of Satyam Computer Services has hired two accounting firms to restate the accounts of the scandal-ridden company.
The two accounting firms, KPMG and Deloitte Touche Tohmatsu, will not however replace Price Waterhouse, the current auditors of the company, said Kiran Karnik, who is on the three-member board, on Wednesday.
Satyam's government-appointed board said on Monday that the company would be appointing an accounting firm in the next 48 hours to restate the accounts. The company, which faces a working capital crises, will not be able to approach banks for loans unless its financial figures are verified, said Deepak S. Parekh, another board member, on Monday.
Satyam's chairman, B. Ramalinga Raju, resigned last week after admitting that the company had inflated profits for several years.
In a letter to Satyam released to the Bombay Stock Exchange on Wednesday, Price Waterhouse has said that its audit opinion should no longer be relied upon, as it was based on financial statements that Raju said last week were inaccurate for successive years.
The decision to replace the audit firm would require a vote by shareholders of the company at its annual general meeting, Parekh said.
The Indian government is considering bailing out Satyam to smooth out its cash problems, according to local media reports. Kamal Nath, the country's Minister for Commerce and Industry, said on Monday that financial help from the government was an option that would be considered, emphasizing that a lot of jobs were at stake at Satyam.
The company employs over 50,000 staff, though the precise number has also been questioned during the investigations.