Satyam wants govt support in its bids for PSU projects
April, 23rd 2009
Satyam Computer Services, which has found a new owner in Tech Mahindra, will continue to ask the government to support its bids for PSU projects. Chairman Kiran Karnik told ET that the firm will continue to request the government to ask PSUs to waive the criteria seeking financial information in its tenders where Satyam is participating. The company had earlier sought similar government intervention in PSU tenders, such as those of BSNL, ISRO, HUDCO and Vizag Steel Plant.
The latest instance of the government stepping in to support Satyam is the Indian Railways project. There is a standard requirement in all PSU tenders that you provide financial information for instance, the balance sheet for the last three years in the bid. We had requested the government to waive this clause for Satyam on a case-by-case basis when a PSU tender came up. In future, too, we will request the government, as the accounts are still being re-stated, Mr Karnik said.
Satyam, whose founder B Ramalinga Raju admitted in January to cooking the companys books for years, has to re-state its accounts for nearly six years. Global auditing firms KPMG and Deloitte are re-stating the companys accounts. The Company Law Board has extended the deadline for Satyam to file returns and documents, including quarterly financial results up to December 31, 2009.
Mr Karnik, who was appointed by the government as Satyam chairman, said he could not say when the re-statement of accounts would be completed. Its a difficult process. A large team at two audit firms is working its way backwards on the balance sheet for the last 5-6 years, he said.
Mr Karnik, who had earlier sought government support for Satyams bid in PSU tenders, had recently asked for similar intervention in a railway ministry project under the Centre for Railway Information System (CRIS). Satyam had emerged as the L1 or lowest bidder, but the railway ministry demanded audited financial statements before finalising the bid. The government stepped in to send a fair letter to the chairman of the railway board.
But sometimes, the government support is not enough to snap up PSU projects. Despite the government stepping in, BSNL refused to entertain the Satyam bid due to non availability of solvency certificate based on certified financial statements.