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Police raids PwC; may question independent directors

india Updated: Jan 13, 2009 18:34 IST
Ashok Das
Ashok Das
Hindustan Times
Hyderabad

The police on Tuesday "raided” the office of the audit firm PricewaterhouseCoopers in the posh Jubileee Hills area as part of the continuing probe into the Rs 7000 crore fraud in Satyam Computers.

The PwC, however, denied that there was any raid by police on its Hyderabad office. PwC sources said that a team of state police officials visited their office and held discussions. “We are providing all the required information,” one functionary at Hyderabad said.

CB-CID sources said that the raid started early in the morning and the police team was assisted by some experiences CAs and auditors.The search was continuing till evening. “ We are going through documents and seized some papers and CDs,” said a police official.

The raid on PWC is seen as a logical corollary after V Srinivas, the former Chief Financial Officer nailed the auditors for their alleged negligence during his police interrogation.

“Two days prior to board meetings, I used to have a discussion with the statutory auditors (PwC) who used to share with me their audit findings. Based on those findings, I used to take comfort and certify the accounts. The auditors never pointed out any deficiencies in the accounts,” Srinivas said in his interrogation statement to the police.

The PwC has been under cloud since Jan 7 when Ramalinga Raju stepped down as company chairman after admitting to country`s biggest fraud so far. The new board of directors appointed by the Government, which started functioning yesterday, has decided to do away with PwC and appoint a new auditing firm which will finalize the Q3 accounts.

Market regulator Securities and Exchange Board of India (SEBI) is also probing the role of PwC in the scam that has dented the image of image of India abroad. Officials from SEBI also checked records with the PwC.

Police sources said that they might question some of the independent directors on Satyam board ‘in a day or two.’ “We want to find out their complicity in the affair or whether they were really in the dark about the goings on in Satyam.”

“ Our present exercise is to ascertain as to how the fraud was perpetrated. At this stage there is no plan to put anyone into lie-detector test,” the same source said.