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17 July 2024

KPMG, Deloitte new auditors for Satyam

By Reuters

India's fraud-hit Satyam Computer Services named new auditors yesterday, a first step by the government-appointed board as the company battles for survival after unveiling the country's biggest corporate scandal.

KPMG and Deloitte will replace Satyam's previous auditor, the Indian unit of PricewaterhouseCoopers (PWC), which said its opinions on the outsourcing firm's financial statements may be unreliable, given the revelations of fraud announced by Satyam's founder and chairman Ramalinga Raju.

India's prime minister met key ministers yesterday to discuss Satyam, and company affairs minister PC Gupta later said "different possibilities" were being examined.

A government bailout is key to ensuring the company has enough cash in the near-term and to restoring flagging investor confidence, analysts said, noting massive job losses from a Satyam collapse could hurt the government heading into national elections expected in the next few months.

Local media have estimated the government would have to pump up to Rs20 billion (Dh1.5bn) into the company to keep it afloat and reassure its nervous clients and employees. Official probes into the scandal have widened after the government ordered the Serious Fraud Investigations Office to open an investigation into the more than $1bn fraud.

Raju, his brother and the company's former CFO have been charged and are in jail in Hyderabad.