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

(a)        whether any significant headway has been made into the Satyam Computers Scam;

(b)        if so, the details thereof; indicating the extent of misappropriation of funds, the period of for which these irregularities have been going on;

(c)        the extent of involvement of auditors and others in the Scam; and

(d)        the steps taken/proposed to be taken to ensure to detect other cases of profit boosting and other corporate frauds? 

ANSWER

THE MINISTER OF CORPORATE AFFAIRS
(SHRI PREM CHAND GUPTA)

(a) to (d): A Statement is laid on the Table of the House.

STATEMENT REFERRED TO IN ANSWER TO PARTS (a) to (d) OF RAJYA SABHA STARRED QUESTION NO. 21 FOR 17.02.2009 REGARDING SATYAM CMPUTERS SCAM

(a), (b) & (c): The Government has ordered investigation on 13.1.2009 under Sec. 235 of the Companies Act, 1956 into the affairs of M/s. Satyam Computer Service Ltd. To be carried out by Inspectors drawn from the office of Serious Fraud Investigation Office. In addition, the Institute of Chartered Accountants of India is also examining the role and the conduct of the statutory auditors of the Company with regard to the statutory functions required to be discharged by them. The said investigations and enquiries are currently under progress.

(d)        Under the framework provided by the Companies Act, 1956, all companies are required to make statutory disclosures that reflect true and fair view of the state of affairs of the company. To facilitate making of such disclosures by companies and for easy viewing of the same by the stakeholders of the companies, general public and regulatory agencies, Government has set up an electronic registry with round – the – clock access through internet. Legal action is taken against such companies that do not comply with the requirement. In addition, the Act provides for appointment of independent, statutory auditors to audit the account s and report to the shareholders. Such audited accounts are also displayed on the electronic registry for general viewing. While the reporting requirements are regulated under the Companies Act, 1956, the conduct of auditors is regulated under the Chartered Accountants Act, 1949. In addition, for listed companies, compliance with these statutory requirements is required to be certified by a company secretary in practice, who in turn is regulated under the Company Secretaries Act, 1980. The Act also provide s powers to the Government to undertake inspection/investigation of companies and for prosecution for false statements relating to the Company in the prospectus, the financial statements or otherwise. Subject to approvals by Company Law Board, the Government can also take action against mismanagement and o0ppression in companies by effecting changes in the management of the companies. Companies as are listed on stock exchanges are also subject to regulation by Securities and Exchange Board of India (SEBI) Act, 1992. The Government and various regulatory agencies take appropriate action under the Companies Act, 1956 and other laws, as warranted, to detect and deal with cases of falsehoods or corporate fraud, as the case may be, through the application of the existing statutory framework.