New Satyam board will continue till probe complete: CLB

Q: Will PriceWaterhouse be a part of this peer review process and is there any move on the part of Sebi to may be even an announcement or directive to listed companies not to employ PriceWaterhouse as auditors?

A: While the investigation is going on it is not right for us to blame one party or the other. The whole purpose of the investigation is to find out where things went wrong. Apart from Mr. Raju's letter 48 hours back, we had nothing in our hands. Now our team has gone to Hyderabad. They are collecting evidence.

As you must be aware, yesterday even though it was holiday, the Ministry of Corporate Affairs and Sebi together went to the magistrate and got an order to impound the books of Satyam with regard to the financial results. These books will be seen by our team.

I understand that the Chief Financial Officer of Satyam had a conversation with our inspection team today. Our team has also requested Mr. Ramalinga Raju for asking him questions in relation to the things that they need to find out. We understand that he would be meeting the team tomorrow.

Beyond this it is not right to say anything about the investigation. We have to wait for the documents and the evidence to come. Only then we will decide where the process went wrong, which entity was responsible for the fraud and so on.

Q: Have any Sebi officials been sent to the US?

A: No, we haven't sent anybody to the US. It is a coordinated action in the Indian jurisdiction, plus we are in touch with the US SEC because Satyam is listed in the New York Stock Exchange and filings have to be made with the US SEC as well. So, we are in touch with each other. We have a MoU with the SEC under which we share information with each other if any wrongdoing spans across the two jurisdictions.

Q: Is the regulator looking at filing a case and if at all when would that be?

A: Filing a case has key aspects. There could be an offence under the Companies Act, in which case it is the RoC (Registrar of Companies) that goes into those issues. There could be an offence under the SEBI act, in which case Sebi will take the initiative. There could be offences under IPC where those offences are cognizable; the police can take cognisance of the offence and proceed in a manner.

Q: On the question of Clause 49, the larger question is, despite Clause 49, corporate governance and so on you had one of the marquee Indian companies, one of the most well-known listed IT companies coming up with a surprising corporate governance failure. Would you say it is a Clause 49 failure?

A: Accidents do happen. But after accidents happen, what we need to do is to thoroughly investigate as to what is the cause of the accident. The cause of the accident can be reckless driving; it can be that your signaling system was wrong. It can be very many other things. It can be that the other guy is at fault.

But, we don't reach a conclusion as soon as we see an accident that the signaling system was wrong or the person was driving recklessly and so on. So, we need to investigate and then come to a conclusion.