KPMG, Deloitte to restate Satyam results

15 January 2009

Scandal-hit IT outsourcing firm Satyam Computer Services has said KPMG and Deloitte will restate its results after the company's auditor, PricewaterhouseCoopers (PwC), admitted that its analysis may be "inaccurate and unreliable".

In a letter to Satyam's new board, PwC said it had relied on the previous regime's information, explanations and "controls over financial reporting" when auditing the company's accounts.

However, last week Satyam's founder and chairman, Ramalinga Raju, confessed to conducting a £1 billion accounting fraud that "wildly inflated" the firm's profitability and assets.

Mr Raju resigned and, along with his brother Rama and former Satyam chief financial officer Vadlamani Srinivas, is currently in jail awaiting trial for fraud.

One of the men appointed by the government to Satyam's board in the wake of the scandal, C Achutan, told Reuters that the new auditors would restate its results as soon as possible. However, the news agency noted, shareholders must first approve the formal appointment of the two firms.

Elsewhere, India's Serious Fraud Investigation Office has launched an investigation into possible insider trading of Satyam's shares after several institutional investors dumped the stock just days before Mr Raju's confession.

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