Srinivas Talluri as signatory to the firm's balance sheetswill now rope in a joint auditor. Highly placed officials in the company said this was decided during the company's board meeting on Friday during which PwC's involvement in the Satyam scam was discussed.
"This was the action contemplated and we have got the board's nod,'' said a senior official.
The company's board, comprising officials of the Airport Authority of India, the Union government and Airports Company South Africa, felt that joint auditors should be appointed "to begin with.'' "The decision was taken given the circumstances we are in and also looking at company law compliance,'' the official said, adding it was also to ensure that the firm wanted to be prepared with another auditor just in case PwC runs into problems with the Institute of CharteredAccountants of India (ICAI).
Other firms being audited by Pricewaterhouse too said they were worried following the arrest of the global auditing firm's partners S Gopalakrishnan and Srinivas Talluri. The two partners have their signatures on the balance sheets of various companies. Officials of these firms wonder whether investor concerns would require them to add more auditors as disengaging PwC is an option they cannot exercise easily.
As per the Company's Act, a firm cannot remove its auditor without following a proper procedure, which is fairly elaborate in nature. "Either they will have to withdraw or be barred by the Institute of Chartered Accountants of India,'' said an official of a firm audited by PwC, pointing out that if removing an auditor was such an easy task, many companies would have done so by now.
Among the firms audited by PwC in Hyderabad are Infotech, Lanco, GMR, Rain Commodities, OCV Reinforcements (formerly Saint Gobain) and Global Hospitals.
Senior officials of Global Hospitals said the arrest of partners was now a "major cause for concern''. PwC partner P Rama Krishna, who is not named in the Satyam scam, signs the hospital's balance sheet. "It (our course of action) will be decided in our board meeting,'' a senior official said.
Officials of other firms said that while it was too early for them to say anything on PwC's involvement in the Satyam scam, they wouldn't want to sit in judgment as yet. Though re-audit of their accounts was not on the cards, a joint auditor certainly was. "There is no reason for a re-audit. We will have to see if we need to add other auditors to the company to address investor concerns, if any,'' said the chief financial officer of a top company audited by PwC in Hyderabad.
"Besides, we don't even know to what extent these people are involved. The act of arresting auditors is not correct since it (their crime) is not proven yet. Things are only at an investigation stage and this is an act that the CA institute should take and not the CID,'' argued the chief financial officer of an firm audited by PwC.
ICAI not informed about arrests
Uttam Prakash Agarwal, vice-president ICAI who is also heading the high power committee to probe the Satyam scam said on Saturday evening that the institute had not been informed by any government agency regarding the arrest of the two PwC partners. "We contacted the partners after media reports said they were arrested.
25 Jan 2009, 0426 hrs IST, TNN
HYDERABAD: Mumbai International Airport Pvt. Ltd, a joint venture company owned by GVK-led consortium that had Pricewaterhouse as its auditor and
They told us that they were only called by the police for inquiry and that no formal arrests were made. We cannot take any action until we get an official intimation from the government agencies,'' Agarwal said. He further said that PwC partner S Gopalakrishnan had voluntarily withdrawn from ICAI council meetings ever since the Satyam scam broke out.
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