Our report unreliable: Price Waterhouse

Scam-hit Satyam (SATYAM.BO : 90.55 -2.2) Computer has appointed KPMG and Deloitte to restate its results prepared by Satyam's previous auditor Price Waterhouse, which said its opinions on the IT company's financial statements might be unreliable, given the revelations of fraud announced by Satyam's founder and chairman Ramalinga Raju.

Price Waterhouse, which had previously said that its audit on Satyam was supported by "appropriate audit evidence" and complied with "applicable standards", changed its stand on Wednesday. Its audit of the IT company's financials for the second quarter ended September 2008 could be "inaccurate and unreliable" in view of the financial irregularities disclosed by Ramalinga Raju. On January 7, Raju disclosed a Rs 7,800 crore financial fraud and admitted that he had been cooking the books for several years.

In a letter to Satyam's new board, Price Waterhouse said it would like to work with the company and "provide assistance to the new board of directors to address any issues that arise in the course of such investigations". KPMG and Deloitte, however, cannot be termed as auditors of Satyam as the appointment of an auditor can be done only after securing the company's shareholders' consent.

"We placed reliance on management controls over financial reporting, and the information and explanations provided by the management, as also the verbal and written representations made to us during the course of our audits," Price Waterhouse said. It audited Satyam from the quarter ended June 2000 to the quarter ended September 2008.

"In accordance with the guidance note (issued by the Institute of Chartered Accountants of India), we state that our audit reports and opinions in relation to the financial statements for the audit period should no longer be relied upon," Price Waterhouse said.

The Serious Fraud Investigation Office (SFIO), which was handed over the probe into the Satyam fraud case, today began search operations at the company's corporate office at Madhapur here.

T R Prasad, one of the independent directors of the disbanded Satyam board, today said he was open for interrogation by any investigation agencies.

The ambulance service venture between the Andhra government and Ramalinga Raju, Emergency Management and Research Institute (EMRI), today said the organisation had nothing to do with scam-tainted company as far as funding was concerned. EMRI lead partner Srivatsan Raghavan said 95 per cent of the funding was from the state government. He said that Satyam was only a technology partner.