Tech Mahindra may restate Satyam accounts for only one year
May, 20th 2009
Tech Mahindra, the new owner of Satyam Computer Services, is exploring option of restating accounts of the beleaguered IT firm for the past one year, instead of the preceding six years. This would enable Satyam to participate in tenders for projects that need proof of financial viability.
Global audit firms KPMG and Deloitte were given the mandate to restate Satyam's accounts, after the firm's defamed founder confessed to inflating profit by fudging the books.
"We need to re-state accounts speedily to be able to participate in request for proposal (RFP) on tenders that require proof of financial viability. While it is not required for all RFP's, it varies from company to company. A proof of financial viability, for instance, is required for all Indian government and public sector projects," said Tech Mahindra vice-chairman, managing director and CEO Vineet Nayyar.
Mr Nayyar is set to join the Satyam board after the requisite regulatory approvals are obtained.
"The new management of Tech Mahindra will have to take a view on whether accounts have to be re-stated for six years after consulting regulatory agencies and the government. The management has already started negotiations on this issue with global audit firms KPMG and Deloitte," Deepak Parekh, HDFC chairman and board member of Satyam, told ET.
In an interview to ET last month, Mr Parekh had said that the re-statement was a slow process. "It will take a long time, as we have to go back to six years. Many documents are not available in the company, many have been torn or misplaced and some confiscated by investigating authorities. A number of investigating agencies have looked at Satyam over the last 100 days. To get a re-statement with limited information is time consuming. All agencies, including the forensic audit team, should work in coordination," he said.