US regulator launches Satyam investigation

21 January 2009

The Securities and Exchange Commission (SEC) is examining whether US investors were misled over an alleged $1 billion accounting fraud committed at the Indian IT specialist Satyam Computer Services, it has been reported.

Officials at the regulator have been in contact with their counterparts at the Serious Fraud Investigation Office in New Dehli in order to coordinate the investigation, sources told Bloomberg.

Earlier this month, Satyam shares - which are traded in Mumbai and New York - fell by over 80 per cent after by the company's founder and then-chairman, Ramalinga Raju, confessed to running a fraudulent accounting scheme to inflate its assets and profitability.

Mr Raju, his brother Rama and Satyam's ex-chief financial officer Vadlamani Srinivas are currently in custody awaiting trial.

Former SEC enforcement attorney Charles Clark told Bloomberg that despite the practical challenges of investigating a case in such a far-off location, US regulators could not ignore the Satyam scandal.

"It's too big a matter for the SEC to take a pass," he said.

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