The “cleaning up” or restating of the accounts of scam-tainted Satyam Computer Services is expected to take at least six months as the newly-appointed auditing firms will have to scrutinise the company’s fudged numbers back to 2002, a top source said.
“Efforts to restate the accounts are progressing rapidly. The Board expects this task to take at least six months. The restated accounts can be expected to be ready earliest by July,” the source said.
A 30-member team from Chennai-based Brahmaiah & Company, appointed as the internal auditor, is going through the fraud-hit IT major’s accounts in Hyderabad.
Besides, two foreign auditing firms — KPMG and Deloitte — have also been mandated by the Government-appointed Satyam Board to scrutinise the IT firm’s books of accounts.
The auditors have been asked to work backwards — 2008-09 to 2002 — to facilitate a speedy declaration of the third-quarter results, the source said.
“The Board wants to declare the company’s 2008-09 third quarter results as quickly as possible and hence the move,” the source said.
Satyam’s disgraced former Chairman B Ramalinga Raju had confessed in January to cooking the company’s balance sheets for several years by inflating profit numbers and understating its liabilities.
Though no deadline has been set for the auditors to come up with the restated numbers, the auditors have been told to complete the task “as quickly as possible,” the source said.
Board to outline stake sale soon, says Karnik
The Satyam board will soon outline the process to invite proposals from prospective buyers, its newly-appointed Chairman Kiran Karnik said.
The former Nasscom president, who was appointed Chairman of the disgraced firm on Friday, said, “Our investment bankers, Goldman Sachs and Avendus, will shortly define the process of the first stage — inviting proposals from the suitors. This will be transparent and investor-friendly. “Only after that will we be in a position to look at those proposals, whether they are meeting our criteria...”
Karnik further said, “There has to be a transition from the government-supervised company status to a professionally-run company. This should be smooth and transparent. It will give a lot of comfort to both investors and employees. This is the key priority.”
He said a number of buyers had shown interest and sent proposals, while others were waiting. The man who guided the Indian IT industry through the outsourcing backlash said there were both short- and long-term challenges for the fund-starved company.
