RoC teams pouring over Satyam books

From "The Hindu"  "Businessline"

RoC teams pouring over Satyam books

Raju may face charges of falsification.

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Documents, memoranda of understandings of Satyam's seven subsidiaries (including Satyam BPO, Citisoft, Bridge Consultance and CA Satyam) are also under the scanner.

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K.V. Kurmanath 

Hyderabad, Jan.. 10 The Registrar of Companies (RoC), which is probing into the Rs 7,136-crore fudged financial numbers case involving former Chairman of Satyam Computer Services Mr B. Ramalinga Raju, is in the process of cracking information from the documents and books of Satyam and its seven subsidiaries.

The balance sheets, role of internal audit department and external audit firm appointed by shareholders, and the role of the audit committee that comprised independent directors would also come under scrutiny.

A team of RoC officials, which seized vital documents and books of Satyam on Wednesday following the shocking admissions made by Mr Raju, are engaged in serious discussions throughout the day.

Documents, memoranda of understandings of Satyam's seven subsidiaries (including Satyam BPO, Citisoft, Bridge Consultance and CA Satyam) are also under the scanner.

Broadly, four agencies are looking into the Satyam scam. While RoC is looking into the violations under the Companies Act and SEBI team is looking into issues related to share trading, the CID of Andhra Pradesh police is addressing criminal cases and the Serious Frauds Commission (under the Ministry of ) is probing the aspect of financial fraud.

The confession itself seems to be a subject of intense discussions at RoC. There is a strong argument that Mr Raju's confession itself is enough to frame a case against him in the court that looks into Economic Offences.

"The burden of (providing) proof is not with us because he himself confessed to it," sources said, quoting a senior Ministry of Corporate Affairs (MCA) official.

While stating that it might take a few more days to frame a report, the sources said Mr Raju might face Section 628 of the Companies Act, which defines penalty for (making) false statements.

"If a person makes a false statement, knowing it to be false, in a report, certificate, balance sheet, prospectus or other document required under this Act that person would face this Section," they said.

Role of audit teams

One of the key aspects the RoC team would look into is the role of independent directors on the audit committee that usually vets the audit report prepared by internal financial department.

"They can easily sense the wrong doings and act as whistle blowers," they said.

The audit report submitted by the external auditors (appointed by the shareholders) too would come under scanner.

Source :

http://www.thehindubusinessline.com/2009/01/11/stories/2009011151100300.htm