Audit firm Pricewaterhouse has said that the lawsuit filed against it by Mahindra Satyam (formerly Satyam Computer) was baseless and that it would defend itself vigorously against any charges of negligence of duties.
Pricewaterhouse was the statutory auditor of the scam-tainted Satyam Computer Services. Founder and former Chairman of Satyam Computer, Mr Ramalinga Raju, had revealed in early January 2009 that the company’s profits had been overstated for years and that assets allegedly worth Rs 7,000 crore were falsified.
Satyam is attempting to shift the responsibility to auditors for the consequences of a carefully and deliberately concealed fraud that was undertaken at the direction of its own senior management, Pricewaterhouse said in a late evening statement on Monday.
Pricewaterhouse was reacting to the IT company Mahindra Satyam’s move to file a lawsuit against the audit firm, its affiliates and certain partners for negligence of duties. The lawsuit has been filed in a city civil court in Hyderabad against Mr Raju, past board of directors, certain former employees besides audit firm Pricewaterhouse, its affiliates and certain partners.
“The fraud perpetrated by Satyam was specifically designed to — and did — circumvent Satyam’s own internal controls and PW India’s audit process, and consequently PW India was a victim of Satyam’s fraud, and will defend itself vigorously against Satyam’s baseless contentions”, the statement said.
Pricewaterhouse also confirmed that it has filed its own civil suit against Satyam and certain members of its former senior management claiming compensation and damages.