From correspondents in Andhra Pradesh, India, 10:30 PM IST
Two partners of Price Waterhouse, the firm that audited fraud-hit Satyam Computer Services' books, have been arrested, police said Saturday.
The Crime Investigation Department (CID) of the Andhra Pradesh police, probing the Rs.70 billion (Rs.7,000 crore/$1.43 billion) fraud in the IT bellwether, arrested chief relationship partner S. Gopalakrishnan and engagement leader Srinivas Taluri Friday night.
Price Waterhouse is the Indian arm of PricewaterhouseCoopers (PwC), the global auditing firm.
CID announced the arrests Saturday evening. 'We have arrested the two partners of the Price Waterhouse last night,' a top CID official told IANS here.
They have been charged under section 120 B (criminal conspiracy) of the Indian Penal Code (IPC) and were being produced before the magistrate at his house, he said.
'This is a case of criminal conspiracy and falsification of accounts. As per the evidence available they are found to be responsible for preparation of misleading accounts and furthering the conspiracy,' said the official, who did not want to be named.
These were the first arrests of auditors since Satyam founder B. Ramalinga Raju quit as chairman Jan 7 while admitting the fraud.
The CID had on Jan 13 conducted searched at the Hyderabad office of Price Waterhouse and seized several documents and records relating to Satyam accounts.
Ramalinga Raju, his brother and former managing director of Satyam B. Rama Raju and former chief financial officer Vadlamani Srinivas have been arrested and lodged in Chanchalguda central jail here.
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The PERSONAL accounts of the Rajus will reveal all untold stories that the socalled probe will DELIBERATELY be precluded to avoid digging out by looking at just the company accounts. The FM (with help from PC)should do this.
When an accounting fraud is detected, esply.a huge one of the Satyam kind, all kinds of clever methods to remain outside the net of criminals are taken recourse to right at the start.
The auditing firms employ, among other types of workers, chartered accountants who are supposedly bound by an oath of allegiance to scrupulous adherence to ethics and meticulous and diligent discharge of their work. In practice violation is the rule of the game, not only in India, but also in the West, the originator of the socalled modern professional theories and practices in several areas.
The big shareholders of course are also at fault, since they have usually access to insider trading to evade the effects of any genuinely steep market fluctuations and scams such as Satyam made bold to indulge in.
If auditing firms can be mandated to have absolute immunity from the consequences of their 'professional' work, then professionalism will simply become a guise for antisocial and unethical accounting scams as desired by those who pay the auditors. The auditors and accountants should know that if they do an honest job (misusing legal loopholes and administrative corruption and incompetence), which the late PM Mr Morarji Desai publicly once declared they are NOT, our country can have enough resources to remove half the quantum of social injustice suffered by underprivileged brethren.
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