Satyam to pay $10mn to US regulator to settle fraud charges

April 6th, 2011 - 6:58 pm ICT by ANI  

Ramalinga Raju New Delhi, Apr 6 (ANI): Satyam Computer Services Ltd. has reportedly agreed to pay 10 million dollars as penalty to the U.S. Securities and Exchange Commission (SEC) to settle accounting fraud charges.

Satyam has also agreed to compulsorily train its officers and employees on securities laws and accounting principles.

The regulator had accused Indian technology-outsourcing provider of overstating its revenue, income and cash balances by more than one billion dollars over a five-year span, The Wall Streets Journal.

The SEC and the Public Company Accounting Oversight Board have also imposed sanctions on five India-based affiliates of PricewaterhouseCoopers LLP that served as auditors for Satyam for “repeatedly conducting deficient audits”, which allowed Satyam to conceal its fraud. The affiliates have reportedly agreed to pay a total of 7.5 million dollars in penalties, and will be barred from accepting new U.S. clients for six months.

The five firms, which did not admit or deny wrongdoing, will also be subjected to independent monitoring, and must make various changes in their policies and procedures, the SEC said.

Meanwhile, the affiliates have said that the regulators did not find intentional wrongdoing by the auditors, or that Pricewaterhouse was otherwise involved in Satyam’s fraud.

“We regret that the Satyam fraud occurred. We have, however, worked hard to learn the lessons of the Satyam matter. We made significant changes to our audit processes and to the operation and oversight of our audit practice,” Deepak Kapoor, chairman of Pricewaterhouse’s firms in India, said.

Following the revelation of the scam in 2009, Satyam’s Chairman Ramalinga Raju had resigned after being forced to admit defrauding investors for years by fiddling the accounts. Later, the Indian government took control of the company, dissolved its board and removed its top managers. (ANI)

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