PwC India Struggles to Overcome Satyam Scandal

In India, business is still recovering from the January revelation that Satyam Computer Services' (now former) Chairman Ramalinga Raju had been cooking the books at India's fourth-largest info tech company since 2000. Some $1 billion in declared revenue at the outsourcing firm turned out to be nonexistent. The auditor signing off on these fraudulent reports? PricewaterhouseCoopers, the biggest accounting firm in the world, with $28 billion in revenues globally and around $180 million in India.

Both Satyam (SAY) and the Indian auditing entity of PwC are still struggling to recover. Following Raju's confession, Pricewaterhouse resigned the account, and Satyam brought in KPMG and Deloitte to conduct a forensic investigation of the fraud. Thomas Mathew, the audit head of Pricewaterhouse India, stepped down on Jan. 27; two PwC partners who handled the Satyam audit have been sitting in Indian jail for two months; and on Mar. 17 the firm named two more auditors who were handling Satyam. They have not yet been formally charged, and PwC India's Executive Director Jairaj Purandare says they are innocent. "We ourselves are victims of the Satyam fraud," he adds.