Friday, July 17, 2009

Yes, the PwC/Satyam Story is Still Out There

We haven't shared any new bad news on PwC (read: Satyam) since, GASP, Monday but thanks to Re: The Auditors, who we'll point out, is on this story like stink on a monkey, we've got some thoughts:

1. It appears that PwC has a serious gag order on external communication re: Satyam. PwC has not held a single press conference in India since the scandal broke back in January. This is dubious for several reasons as you'd think there would some statement by P. Dubs but as we and others have noted, because no one seems to GAF here in the States, there's probably no rush to call attention to the pachyderm. The bigwigs figure that playing dumb will work in the West until someone starts making noise.

2. India's regulators and Satyam are playing hardball - Understandably, India is not cool with what happened and especially not cool with PW India's lack of admitting "yeah, our bad". "India's Enron" isn't a terribly flattering turn of events for a country that had been kicking ass and taking names lately so regulators and Satyam themselves is going on the offensive. The market regulator has announced that it will fund lawsuits on behalf of investors against whomever it has to. Plus, a big "Fuck you PwC" occurred in Forbes India where the Chairman of Satyam that took over after the scandal is quoted as saying "PwC messed up big time" noting that they didn't apply elementary auditing procedures.

3. When the lawsuits start, PwC will deny 'til they die - When it was reported that PwC could be banned from auditing in India it sent out "internal communication" to all employees (um, email) basically summing up the following:
  • ICAI cannot ban the firm in India
  • ICAI does not have power to act against firms
  • Newspaper report on banning PW incorrect
  • ICAI can take action only against partners
  • Any action against partners a long process
  • PwC was not contacted by ICAI high powered committee
So it's pretty clear that when PwC does decide to join this party, they'll be coming out swinging. This "communication" seems to be laying the ground work internally to rally the troops because this will surely get worse before it gets better and they're going to want some people in their corner.

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