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Tuesday, January 10, 2012

Satyam Accounting Fraud

Audit firm PWC has filed a suit against former chairman of Satyam B Ramalinga Raju  and others claiming damages of Rs 100 crore for "deliberately" concealing key information that led to the Rs 14,000-crore accounting fraud. 
Mahindra Satyam (after Tech Mahindra-acquired Satyam )filed a suit in city civil court, Hyderabad, seeking damages from PW and former Satyam Board for "inter-alia perpetrating fraud, breach of fiduciary responsibility, obligations and negligence in performance of duties". 
Last year, Mahindra Satyam (after Tech Mahindra-acquired Satyam) had agreed to pay USD 125 million (over Rs 587 crore) in an out-of-court settlement to end a bunch of class action suits filed in the US. 
US SEC has in April, 2011 imposed a penalty of USD 17.5 million jointly on Satyam Computers, PriceWaterhouse India and affliates auditors for the accounts bungling that went undetected for several years
Satyam agreed to pay a fine of USD 10 million towards settlement of charges of fraudulently "overstating the company's revenue, income and cash balances by more than USD 1 billion over five years. 
SEC asked PriceWaterhouse India to pay USD 6 million in penalty for conducting "deficient audits of the company's financial statements and enabling a massive accounting fraud to go undetected for several years

  Satyam Accounting Fraud





Re-Statement of Accounts
As a result of the accounting fraud, Satyam Computer Services restated its financial results for the period 2002 to 2008 and the same published in September 2009.




NOTE: Satyam was taken over by the Mahindra group in 2009 and rechristened it as Mahindra Satyam, after its founder Ramalinga Raju admitted to an about Rs 14,000-crore accounting scam in 2009.On 13th April 2009, via a formal public auction process, a 46% stake in Satyam was purchased by Mahindra & Mahindra owned company Tech Mahindra, as part of its diversification strategy. Effective July 2009, Satyam rebranded its services under the new Mahindra management as "Mahindra Satyam"

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