Following the effective turnaround of the fraud-hit Satyam Computer into a successful business venture, Mahindra Satyam believes that it is high time for the the former auditors, management and owners to pay up for their past misdeeds at the company.
The erstwhile Satyam Computer had to suffer huge losses due to the misdeeds of its former auditors, as also the previous owners and management, Mahindra Satyam chairman Vineet Nayyar said on the sidelines of the World Economic Forum Annual (WEF) meeting.
Mahindra Satyam was one of the strategic partners of the 5-day WEF meeting that began on January 25.
Asked about the damages sought from the former auditor PwC and the previous promoter and top management, Nayyar said, “We wanted to tell them it’s high time that you pay for the misdeeds and the subsequent huge losses suffered by us.
“We have suffered hugely and we want it back from them. There were lapses in the fiduciary responsibilities and those were huge gaps,” he added.
Once a leading Indian IT company, Satyam Computer was hit by a multi-million dollar corporate fraud, admitted by its own founder and then chief B Ramalinga Raju over three years ago.
After the government intervention into the case, the company was sold through an auction process to the auto-to- technology conglomerate Mahindra group, which renamed it as Mahindra Satyam.
Besides the previous promoters and management personnel, the company’s then auditors were also chargesheeted for the fraud.
Talking further about the fraud, Nayyar said that the former management had hired huge excess staff to cook up the company’s books and to show highly inflated revenue growth.
PwC: Don’t blame auditors alone
Asserting that good corporate governance is a collective responsibility, global consulting and auditing giant PwC has said auditors alone should not be blamed for corporate frauds.
“The corporate governance should not be confused with only the failure at auditor’s end,” Deepak Kapoor, chairman, Pricewaterhouse Coopers, India, said on the sidelines of the World Economic FOrum meeting.
Kapoor said it was more about the ethics and value system that a company or a corporate group maintains.