Set a Thief to Catch a thief

Two Price Waterhouse partners held
- CID claims auditor duo cleared forged Satyam papers for ‘a price’
From "The Telegraph"

Hyderabad, Jan. 24: Two Price Waterhouse partners were arrested today for alleged falsification of Satyam Computer Services audit reports in connivance with promoters led by founder and former chairman B. Ramalinga Raju.

S. Gopalakrishna and Srinivas Talluri were held this evening by investigators of the Andhra CID after questioning that lasted several hours yesterday. Both have been remanded in judicial custody for 15 days.

CID sources claimed that the two auditors had admitted to have cleared forged bank statements and other unverified documents “for a price”. But the sources did not specify the nature of the alleged favours. “Confessions” during interrogation are not admissible in court.

A spokesperson for Price Waterhouse, the statutory auditors of Satyam, said it had “not seen any evidence of any wrongdoing” by the two.

CID chief A. Sivanarayana had said earlier in the day that the auditors had been detained for their connivance with the promoters. The detention was later converted into formal arrest.

Gopalakrishna, Price Waterhouse’s chief relationship partner at Satyam, and Talluri, its engagement leader, are accused of issuing certificates for balance sheets and other financial statements prepared by the erstwhile Satyam management over the past eight years. The Satyam scandal had come to light when Raju claimed that the company’s balance sheets showed non-existent cash surplus and bloated profits.

The two auditors had been quizzed last Tuesday at Price Waterhouse offices in upscale Jubilee Hills and Satyam Info City. On Thursday, they were called to the CID headquarters.

The CID sources said Gopalakrishna, a member of an Institute of Chartered Accountants of India (ICAI) council in the southern region, had been censured for audit problems in India Cements takeover of Raasi Cements in 1998. Gopalakrishna was also a signing authority on the financial statements of Global Trust Bank, which collapsed under the weight of financial irregularities, and had to be merged with Oriental Bank of Commerce in 2004.

In Delhi, a Price Waterhouse statement said: “We greatly regret that two Price Waterhouse partners have been detained today for further questioning. We do not know the basis for them being detained.”

We have seen police looting people.
That is not surprising as I have always maintained that there is no difference between the police, politician and criminals. The are the same three headed monsters. In our Ramayana we read of Ravana the demon having ten heads. This being Kalyug, Ravana has to manage with just three heads.
The central head is the politician and the two side ones are those of the police and the criminal.
We also know that auditors wink and turn a blind eye to the going-ons of management since they are paid by the management of companies. The one who pays, call the tune.
But the auditing profession could turn so low that one of the best auditing firms known internationally could have its partners arrested , is new.
I would request the government to audit the accounts independently of many other firms so that we know the skeletons lying in the cupboards.
I know the government is no white angel.It has its own skeletons which is brought out every year by the CAG audits.
That the CAG audit reports are just thrown out of the window is another matter as in most instances they nail the ministers in power.
But this being an audit of private companies, the government may condescend be more honest.

Radheshyam