Govt sidesteps demand for JPC probe into Satyam scam
February, 18th 2009
Government today did not accede to the Opposition demand in Rajya Sabha for a Joint Parliamentary Committee probe into the Satyam Computers Scam.
Corporate Affairs Minister Prem Chand Gupta stating that only on Monday the government had ordered CBI investigation into the whole issue, completely evaded the demand for a JPC. He however told the Opposition members that the government was ready to answer each and every question they had on the issue.
Replying to supplementaries during Question Hour he said collapse of Satyam is not in the long-term interest of the country with 53,000 employees, 300,000 shareholders, 150 plus Fortune 500 companies on its clientele and operations in 66 countries.
Stating that the case of Satyam was "very unfortunate" he said it had shaken the confidence of the corporate sector in India and abroad and also investors as a whole. It had given a bad name to the corporate sector and the regulatory mechanism, however it is "an aberration" and not the practice, he added.
Satyam Computers Scam dominated entire question hour today, as Opposition members in the Rajya Sabha did not allow any other question to be taken up.
Gupta said Reserve Bank of India has no power to black list or ban any audit company and it can only issue advisory. It is Institute of Chartered Accountants of India an independent and statutory body that allows the auditing firms to function, which was competent to do so.
He said the Serious Fraud Investigation Office (SFIO) under his ministry had also been given three-months to wrap up its probe into the Satyam scam.
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.
Asked if 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 taking appropriate action against them.