Thursday, June 25, 2009

Deloitte not to restate Mahindra Satyam’s books

Audit firm Deloitte, which along with KPMG, had been mandated to restate the accounts of Mahindra Satyam, the erstwhile Satyam Computer,is reliably learnt to have opted out of its restating role due to a possible conflict of interest. Deloitte is the statutory auditor for Tech Mahindra — a part of the Mahindra Group that had acquired Satyam Computer — and hence can’t undertake the twin roles, said people close to the development.

The problem arose because the Mahindra Group is said to be considering a merger between Tech Mahindra and Mahindra Satyam.

When contacted, a Deloitte spokesperson declined to comment on the issue citing client confidentiality. A Tech Mahindra spokesperson also didn’t want to comment. Deloitte and KPMG had been appointed to restate the accounts of Satyam after the former chairman of Satyam, B Ramalinga Raju, admitted to falsifying the accounts of the Hyderabad-based software company.

Deloitte and KPMG had been mandated to go through past accounts of Satyam to trace the methodology used by the Satyam’s disgraced chairman and his team to execute the fraud, estimated to about Rs 7,000-Rs 8,000 crore. The mandate was to dig up accounts over a seven-year period as investigators expect the fraud to have been initiated over that period. Deloitte’s move raises concerns about a possible delay in submission of the restated accounts of Satyam. KPMG declined to comment on the issue. It had earlier been reported in ET that the restated accounts of Satyam could be ready in four months.

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