Rajeev Chandrasekhar's official website - Member of Parliament

 

GOVERNMENT OF INDIA

Ministry of Corporate Affairs

 

RAJYA SABHA

UNSTARRED QUESTION NO 149

TO BE ANSWERED ON 17.02.2009

 Reasons behind the Satyam Computers Fraud Question  .

 

149.

SHRI RAJEEV CHANDRASEKHAR

 

 

Will the Minister of CORPORATE AFFAIRS be pleased to state:-

(a)        whether the Satyam fraud represents the breakdown of regulatory oversight or is due to the connivance of auditors; and

(b)        what are the various investigations underway and by which agency and under what provisions of law with the maximum punishment under each provision?

ANSWER

THE MINISTER OF CORPORATE AFFAIRS

(SHRI PREM CHAND GUPTA)

(a)        The events relating to Satyam Computer Services Ltd relate to a particular Company and do not represent a breakdown of regulatory oversight. The role of the internal and statutory auditors of the Company and exercise of due diligence by them to ensure true and fair financial reporting, including in statutory returns and filings made by the company, is also under investigation along with other aspects.

(b)        The Ministry has ordered investigation into the affairs of the company under Section 235 of the Companies Act, 1956 by Inspectors drawn from amongst the officials of the Serious Fraud Investigation Office (SFIO). In addition, the Institute of Chartered Accountants of India has been asked to ascertain the actual role and discharge of functions by the statutory auditors with regard to the accounting and auditing standards and the provisions of the Companies Act, 1956 for action under the provisions of the Chartered Accountants Act, 1949 as warranted on the basis of findings. In addition, as of date, information has been received of investigations having been taken up by the Securities and Exchange Board of India (SEBI) under the SEBI Act, 1992, by the Income Tax authorities under the provisions of the Income Tax Act, 1961, by the CID under the Andhra Pradesh Police with regard to criminal aspects relating to some complaints lodged against some of the persons involved with the affairs of Satyam.

The respective investigations are under progress. The punishment/ penalty that may be imposed would depend upon the offences that are prima facie established for launching prosecution against the persons concerned under various provisions of the law.