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Audit firm officials have confessed: police
January, 27th 2009

The Andhra Pradesh Police claims the two Price Waterhouse executives arrested in relation to the Satyam case have confessed, continuing the trend seen thus far with the police claiming significant success in getting almost everyone arrested in the case to sing.

The crime investigation department of the Andhra Pradesh Police says the two executives, S. Gopala Krishnan and Srinivas Talluri, have confessed their involvement in the case, investigations into which began after a shocking 7 January revelation by Satyam Computer Services Ltds founder B. Ramalinga Raju that over the years, he had fudged the companys books to the tune of at least Rs7,136 crore. Price Waterhouse, an arm of audit and consulting firm PricewaterhouseCoopers (PwC), was the companys auditor.

Since then, the police have arrested Raju, his brother and the companys former managing director B. Rama Raju, the companys former chief
financial officer Srinivas Vadlamani, and Gopalakrishna Raju, a manager at SRSR Advisory Servies Pvt. Ltd, through which the Raju family controlled Satyam and other firms promoted by them. The police have claimed that all of them have given confessional statements. The police have submitted to a city metropolitan magistrate that the two Raju brothers and Vadlamani had disclosed during questioning that Krishnan and Talluri had conspired and colluded with them and signed the balance sheet and profit and loss account without verification and scrutiny, according to police department documents that were reviewed by Mint.

The police also told the magistrate that the two Price Waterhouse executives confessed their involvement in the crime.

A. Raghunathan, the counsel for Price Waterhouse, denied that his clients confessed to the crime. The claim that the auditors have confessed to the crime is a wholesale travesty of truth. From the time the crime was registered, the auditors were extending their fullest cooperation to the investigating police. They have shown on the basis of records how there is not a semblance of culpability on their part in regard to the transactions that are under scrutiny.

Krishnan and Talluri are both partners at Price Waterhouse and have been auditing Satyams books since 2000-01.

The police also informed the magistrate that Krishnan subsequently helped them locate documents and computers relating to the case and that these had been seized.

Executives at PwC werent available over the phone and email for comment on Monday, a public holiday in India.

Indias regulatory body for chartered accountants, the Institute of Chartered Accountants of India, is also conducting a separate probe on the audit firms possible involvement in the fraud at Satyam.

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