CID to grill former Satyam auditors

HYDERABAD - The Andhra Pradesh police will Wednesday and Thursday grill two suspended PriceWaterhouse employees allegedly involved in the Satyam Computer Services fraud.

A city court Tuesday sent S. Gopalakrishnan, who was chief relationship partner at PriceWaterhouse, and Srinivas Talluri, who was engagement leader, to the custody of Crime Investigation Department (CID) of the police for two days.

They will be handed over to the CID Wednesday morning.

PriceWaterhouse (PW) is the Indian arm of the US-based PricewaterhouseCoopers (PwC).

The court also dismissed the bail plea of the two suspended officials, who had been on Jan 24 sent to judicial custody till Feb 6.

The CID, probing Rs.70 billion (Rs.7,000 crore/$1.43 billion) fraud, had sought their custody for five days.

While seeking their police remand, public prosecutor K. Ajay Kumar told the court that their custodial interrogation was necessary to find out if they were indeed part of the global auditing firm PwC.

‘Their interrogation is essential to know the deeper nexus between the arrested auditors, PW and the accused in Satyam scam,’ he said.

The prosecutor argued that PW and PwC were separate entities. He said a prime facie case had already been made against the auditors who were never part of PW but were working for New Delhi-based auditing firm Lovelock and Lewis. The public prosecutor also told the court that PW had no branch in Hyderabad.

Defence counsel C. Mastan Naidu, however, argued that the two represent PriceWaterhouse and furnished a copy of the Institute of Chartered Accountants of India (ICAI), indicating a branch of PriceWaterhouse in Hyderabad. He also pointed out that ICAI allowed auditors to work as partners for more than one auditing firm.

Gopalkrishnan and Talluri were arrested Jan 23 by the CID under section 120b (criminal conspiracy) of the Indian Penal Code (IPC).

The CID Jan 13 raided the Hyderabad office of PriceWaterhouse and seized several documents and records relating to Satyam accounts.

Meanwhile, the court also heard arguments on the bail plea of former SRSR Advisory Services general manager Gopalakrishnam Raju and posted the matter for orders on Feb 6.

SRSR Advisory was floated by disgraced Satyam founder B. Ramalinga Raju to manage the family’s stake in the company.

Ravinder Reddy, counsel for Gopalakrishnam Raju, argued that the accused was not at all connected with the Satyam fraud or the other accused arrested in the case.

Opposing the bail plea, the prosecution said the accused, if granted bail, could tamper with the evidence. He said Gopalakrishnam Raju was a key man in the entire episode and had been closely associated with former Satyam chairman Ramalinga Raju and his relatives for 20 years.

The prosecution told the court that he was one of the directors of Maytas Properties, a firm promoted by Ramalinga Raju’s son. ‘He was either a shareholder, a member or a key person in more than 300 companies floated by Ramalinga Raju and his family,’ he said.

The prosecution informed the court that Gopalakrishnam Raju was shifting the registered property documents of Ramalinga Raju and his family members and was thus ‘causing the disappearance of the evidence’.