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Wednesday, Jan 14, 2009
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Centre orders SFIO probe into Satyam fraud

Ashok Dasgupta

The investigating agency will also go into the role of directors, promoters and auditors

Probe ordered on the basis of RoC report, says Minister
Decision on appointing more directors will be taken as and when required

NEW DELHI: The Union government on Tuesday ordered the Serious Fraud Investigation Office (SFIO) to probe the scam in Satyam Computer Services in view of the grave nature of the economic offences committed by the Hyderabad-based IT major.

Report in three months

Corporate Affairs Minister Prem Chand Gupta told journalists that the probe was ordered under Section 235 of the Companies Act on the basis of a preliminary report submitted by the Registrar of Companies (RoC, Hyderabad), which scrutinised the books of accounts of Satyam and its eight subsidiaries.

“The SFIO will submit its report in three months … The government has ordered the probe [by the SFIO] based on the RoC report. The SFIO will look into the entire gamut of irregularities and other related anomalies in [the] books of accounts and other acts of commission and omission,” Mr. Gupta said.

The investigating agency “has also been asked to go into all aspects [and role of] directors, promoters, Satyam company, auditors and all,” he said.

Role of regulator

On the role of the regulator and regulations, Mr. Gupta noted that the issue was also being looked into. “We will have detailed discussions on this [aspect].”

As for the appointment of more directors on the Satyam Board, the Minister said Corporate Affairs Secretary Anurag Goel was in “constant touch” with the Board and “a decision [on appointing more directors] will be taken without delay as and when required. We are working on that.”

On Sunday, the government set up a three-member Board, comprising HDFC Chairman Deepak Parekh, the former Nasscom president, Kiran Karnik, and the former Presiding Officer of the Securities Appellate Tribunal, C. Achutan, to salvage the crisis-ridden company and chart out the future course of action.

Asked about the possibility of Satyam’s merger with another IT major, Mr. Gupta said: “You are asking me something which is not a concern of today.”

‘Guilty won’t be spared’

On the delay in taking action against auditing firm Price Waterhouse, he said: “There is a procedure for everything, the ICAI has its own procedure ...You cannot jump the queue. Don’t assume anything unless facts are out.”

The Minister reiterated that the government was seized of problems and no one found guilty would be spared.

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