Why HDFC Chairman Deepak Parekh believes Satyam scam was failure of chartered accountants?

HDFC Chairman Deepak Parekh on Wednesday said the Satyam scam was in reality a failure of chartered accountants (CAs) who failed to flag discrepancies in account books.

Participating in a book launch event organised by industry body CII, Parekh said all independent directors of Satyam Computer Services functioned as rubber stamps of the company's founder B Ramalinga Raju.

"It ( Satyam scam ) was really a failure of CAs who audited accounts of Satyam Computer Services," he said.

Satyam Computer Services was hit by an accounting scam perpetrated by its founder Raju that came to light in January 2009 and the once-storied company was later acquired by Tech Mahindra in the same year in April.

The Rs 7,800 crore fraud at Satyam Computer came to light in January 2009 after Raju admitted to cooking up account books and inflated profits for several years.

After the takeover by Tech Mahindra in April 2009, the firm was initially operated as a separate entity Mahindra Satyam. In 2012, Mahindra Satyam was merged with Tech Mahindra.

Parekh asserted that the CEO of any organisation must understand that they are working for the shareholders of the company.

He observed that the number of companies going down has increased and people have lost money and confidence due to the greed of some people.

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"Greed is something you can't control," Parekh said in a lighter vein.

Chartered accountants apex body ICAI had cancelled the membership of six chartered accountants with respect to the accounting fraud at Satyam Computer Services.

Market regulator Sebi had also imposed a two-year ban on Price Waterhouse network entities from issuing audit certificates to any listed company in India with respect to the multi-crore scam at the IT major.

Also, speaking at the event, former deputy chairman of the erstwhile Planning Commission Montek Singh Ahluwalia said the government played a crucial role by incredibly limiting its role by superseding the then Satyam board and appointing reputed experts from the private sector.

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In a lighter vein, Ahluwalia also said platforms like Netflix should make a film on the Satyam scam.

After superseding the Satyam Board in 2009, Parekh was named to the Satyam board, along with Kiran Karnik, T N Manoharan, S B Mainak, C Achutan and Tarun Das.

Parekh was the key architect of Satyam Computer Services revival.