CBI asked to probe Satyam scam, Govt tells RS

New Delhi, Feb 17 (PTI) India's Premier investigating
agency, CBI, has been ordered to probe the accounting fraud in
Satyam Computer, whose founder Ramalinga Raju had disclosed
cookings books over 40 days ago, the Rajya Sabha was informed
Tuesday.

Replying to supplementaries during Question Hour in the
upper house of Indian Parliament, Rajya Sabha, Corporate
Affairs Minister Prem Chand Gupta said while the Serious Fraud
Investigation Office (SFIO) under his ministry had been given
three-months to wrap up its probe into the Satyam scam, no
time-frame has been set for Central Bureau of Investigation
(CBI).

"Yesterday (Monday), the government ordered CBI
investigation into the whole issue," he said.

Gupta evaded replying to demands for setting up a Joint
Parliamentary Committee to go into all aspects of the Satyam
scam, including allegations of political patronage to its
disgraced founder B Ramalinga Raju.

He also did not say if investigation would be launched
into accounts of the companies audited by Price Waterhouse,
the statutory auditors for Satyam.

"The SEBI has ordered peer audit review of companies
listed on Sensex and Nifty. Once peer review is over,
government will decide what to do," he said.

Gupta said RBI had in October 2004 issued advisory to
banks not to engage Price Waterhouse for audits after
unearthing of accounting deficiencies in Global Trust Bank
(GBT), whose account it was auditing.

Three years later the advisories were withdrawn, Gupta
said but did not give the precise reason for withdrawal.

"RBI has no legal power to blacklist any audit firm,"
Gupta said, adding that only ICAI as the regulator has the
authority to do so.

Asked if Institute of Chartered Accountants of India
(ICAI) had been asked by RBI to look into the role of Price
Waterhouse in the audit of GTB accounts and submit its report,
he said ICAI has completed inquiry into the audit of accounts
for 2001-02 while the same for 2002-03 financial year was
under process.

"Proper (and) due action will be taken against the erring
officers," he said, adding that ICAI had found three persons
guilty and they are in the process of punishing them.

Asked about the previous probes into Satyam, Gupta said
after the Ketan Parekh scam, the government had on September
12, 2001 ordered inspection of books of Satyam. RoC submitted
its report in April 2002.

The then Government compounded some offences and levied
some penalties and closed the case, he said.

Gupta said the collapse of Satyam is not in the interest
of the country. "The case of Satyam is a very unfortunate
case... (but) this is only an aberration."

All investigating agencies including Income Tax
Department, Securities and Exchange Board of India (SEBI),
Enforcement Directorate and SFIO were conducting inspection in
a "very coordinated" fashion.

Although the Andhra Pradesh police arrested Raju and
others and launched its own probe, the state government
yesterday said it has issued an order recommending a CBI probe
into the scam.

"We are concerned about 53,000 employees of Satyam," Gupta
said, adding that the Institute of Chartered Accountants of
India was also examining the role and the conduct of the
statutory auditors for the company.

Raju, the former chairman of Satyam Computer Services Ltd,
on January 7 disclosed that he had falsified accounts and
financial statements of the company over the past several
years. PTI