ICAI holds two more CAs guilty in Satyam scam

Written by Neha Pal | Neha Pal | New Delhi | Updated: Jun 21 2012, 09:10am hrs
The countrys accounting regulator, the Institute of Charterd Accountants of India (ICAI), has finally passed its order on the remaining two chartered accountants S Gopalakrishnan and V Prabhakar Gupta involved in the R14,000-crore Satyam fraud, thereby closing its investigation in the countrys biggest corporate scandal.

The institute has given its verdict on ex-PW (Price Waterhouse) partner S Gopalakrishnan and former internal auditor V Prabhakar Gupta by barring them and have ordered for the removal of their names from the register of members permanently, said ICAI president Jaydeep Shah. The accounting regulator has also imposed a penalty of R5 lakh on the guilty members.

The institute was investigating the role played by the six chartered accountants involved in the Satyam scandal since January 2009. These members include ex-PW partner S Gopalakrishnan, V Prabhakar Gupta, who were barred recently in June, ex-CFO of the erstwhile Satyam Computer Services Srinivas Talluri, Pricewaterhouse auditor Vadlamani Srinivas, who was barred in January. In December last year, the ICAI had barred from practice two Lovelock & Lewes auditors Pulavarthi Siva Prasad and Chintapatla Ravindernath on account of gross negligence in carrying out the statutory audit of the company.

Almost three and half years after the revelation of the Rs 14,000-crore Satyam scam, ICAI has finally held all the six chartered accountants involved in the companys operations guilty of professional misconduct, said Shah, adding, We have ordered for a permanent cancellation of the licenses along with a penalty of R5 lakh on the six guilty chartered accountants involved in the Satyam scandal.

The biggest question on the auditing of the Satyam was raised when the Sensex-30 company was carrying a non-existent cash reserve of R5,040 crore on its balance sheet and was certified correct by its audit firm PW, the Indian arm of PricewaterhouseCoopers.

Records showed fictitious accruals remained on the books of Satyam Computer Services for years. The companys balance sheet showed reserves and surplus of R2,517 crore in March 2004. That sum rose to R7,221 crore by March 2008.

On January 7, 2009, the Satyam fraud came to the surface followed by the arrest of B Ramalinga Raju on January 9 on charges of criminal conspiracy, forgery, cheating and misappropriation of funds. The responsibility to solve the Satyam enigma was given to four agencies, which included the Serious Fraud Investigation Office, market regulator Securities Exchange Board of India, the ICAI and CBI.