SEC Charges India-Based Affiliates of PWCfor Role in Satyam Accounting FraudFOR IMMEDIATE RELEASE
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It is propaganda rhetoric, similar to those written before by Ould Abdalla, designed to anesthetize the diaspora and extinguish their wails for a proactive government that harvests the goodwill of its people and leads them from dejection and abject poverty to stability and prosperity.
Allow me to shed light on a few points. To begin with, it has been confirmed that the man from Denmark was not the one who dressed himself like a woman and exploded himself at the graduation ceremony. Pictures of him sitting at the ceremony dressed as a regular man have been found. And Pictures of his dead body still dressed in the same clothes have been found. Your government in its first news release has circulated the pictures of the dead body of the young man.
Did your government follow up on the information? Frankly, I doubt it!
This is an indication of how your government has failed to implement a consistent information network which will not only save your government from embarrassment but will also help it in decisions against the evil groups you say to be fighting. Your government has often resorted to reckless announcements and fishy press releases. It does not go the extra mile to get the factual, correct and reliable information. And you know what, Mr. Prime Minister, unreliable information comes from unreliable sources. Is that what your government is? Unreliable? Well after so long on the job, it has yet to proof itself of reliability!
Your Excellency, it was the government’s responsibility to ensure the safety and security of the graduation ceremony. So far, neither you nor the President has taken any responsibility for your shortcomings. Instead, you are constantly pointing the finer at the opposition groups in utter disregard for the fact that your government’s fault and failure to guarantee the security of the few blocks in Mogadishu that you control.
You have said that the TFG’s principle purpose is to “… prepare the way for the establishment of legitimate and accountable public institutions. (We have already taken the initiative and hired Price Waterhouse Coopers to ensure the accountability of international donor funds.)”.
First, hiring a firm that tracks the accountability of the international donations has absolutely nothing to do with your government’s ability and capacity to establish legitimate and accountable public institutions. The legitimacy and accountability of public institutions is a result of the efforts of the government and the efficiency and knowledge of the staff that run these institutions. I am sorry but a foreign company tracking donations cannot create such an atmosphere.
Secondly, of all the international accounting firms that your government could have hired, Pricewaterhouse Cooper should have been the least to be considered for the job. Take a look at how many scandals and lawsuits they have been involved in and you tell me, Mr. Prime Minister, if that polished image that you give of PwC is still intact in your eyes unless you are wearing tainted glasses.
Below are a few of the legal troubles that PwC was involved in in the last few years. I left the reference numbers in there intentionally so that they could be cross-referenced. These same events have been widely reported on many rebuttable media. I also left the reporting language the same and hereby give credit to Answers.com, kycbs.net, Reutors, New York Times and knowledge.wharton.upenn.edu
Legal Troubles of Price Waterhouse in the 1990s and 2000s:
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A protracted battle over the company's audit of Bank of Credit and Commerce International ended in 1995 with a payment of $200 million, significantly less than the $11 billion sought by the creditors of the collapsed bank. In addition to hefty settlements, the suits led to (1)soaring insurance costs for the accounting firms. By the mid-1990s, many insurers refused to even cover the auditing practices of the Big Six firms, forcing Coopers & Lybrand and Price Waterhouse to set aside money to cover themselves. | |
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In July 2007, PwC agreed to pay $225 million to settle a class-action lawsuit brought by shareholders of Tyco International Ltd. over a multibillion-dollar accounting fraud.[38] | |
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Recently, PwC was criticised[39][40][41][42][43][44], along with the promoters of Satyam, an Indian IT firm listed on the NYSE, in a $1.5 billion fraud. PwC has written a letter to the board of directors of Satyam that its audit may be rendered "inaccurate and unreliable" due to the disclosures made by Satyam's (ex) Chairman.[46] PwC's U.S. arm "was the reviewer for the U.S. filings for Satyam."[47] Consequently, lawsuits have been filed in the U.S. with PwC as a defendant. | |
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India's accounting standards agency ICAI is investigating partners of PwC for professional negligence[40] in the now-defunct Global Trust Bank Ltd. case of 2007. | |
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PwC was also associated with the accounting scandal at DSQ Software[54] in India. | |
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Following the Satyam scandal, the Mumbai-based Small Investor Grievances Association (SIGA) has requested the Indian stock market regulator SEBI to ban PwC permanently and seize its assets in India alleging few more scandals like "Ketan Parekh stock manipulations."[55] | |
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PricewaterhouseCoopers agreed to pay $97.5 million to the state of Ohio to settle a class-action lawsuit on behalf of investors in troubled insurer American International Group, which uses PwC as its independent auditor. | |
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PricewaterhouseCoopers (PwC) has made an out-of-court settlement with shareholders of e-district who alleged the accountancy giant had failed to discharge its legal responsibilities. |
Should I continue Mr. Prime Minister? I think you get the picture. Companies do make mistakes. However, mistakes rarely fall into as regular a pattern as the above cases clearly indicate – auditing designed to perpetuate fraud and malpractice. My question to you is; who introduced your government to PwC? Was it Oulad Abdalla? Or was it the managers of Project Somalia, Ethiopia and Kenya? Excuse me but I am only taking a wild guess! I know that our nation has been used as a project for the last 20 years and I have a premonition that the PwC audit contract is a continuation. But it is sad that your government is implicated in this. If you like, Mr. Prime Minister, you can claim ignorance. But, then, I too will claim that through ignorance you failed your duties by taking gratification in ignorance over the prudence of hard work and caution. Your government, in all honesty, should have done the leg work. The shady signature of the sea pact with Kenya and then this? Sir, with all do respect, your government may be the wholesaler in Project Somalia.
PwC is not the only telling sore spot of your government. Lately, I was wondering if you and the President are on the same page at all. You signed a deal with Puntland only to be repealed by the President. You and the President are outside the country more than you are in it, often traveling expensively with a large entourage. Your government has yet to do anything for the displaced unfortunate Somalis who look up to you for help. Whether it be Mogadishu or Beletwein, your government is not visible in helping its unfortunate subjects. I have to mention Beletwein, specially, where the current war with the forces of the devil has caused an unthinkable suffering, your government is invisible. The people of Beletwein, who welcomed your government after it was elected in Djibouti so that the President could show the world that there is a spot besides a few blocks of Mogadishu where he is supported are now bearing the brunt of bloodshed without your government, yet again.
Your government lacks vision and foresight and you look to foreign organizations to translate the culture, the cries and the besieged sentiments of your own people into dysfunctional political strategy. Your government depends on foreigners more than it depends on the resource, the social might and the good will of its own people. Your government has disenfranchised its own society because you have no plans to move the nation forward. They do not support Shabab or Xisb – the fellowship of the devil- but they search high and low failing to see anything tangible your government has to offer. Your government limited itself to survival in villa Somalia! So then, it begs the question, Mr. Prime Minister, why are you and the President always traveling? I’ill you why! Because that is the only thing your government knows – beg, beg and beg some more and take your people out of the equation.
Your government has failed to utilize the weaknesses of the opposition and speed up the recovery of a battered nation. Your government is always catching up and reacting to events driven by the opposition and I am sure you know the answer to this more than I do, Mr. Prime Minister. a government by the warlords, for the warlords; a government for the middlemen by the middlemen cannot be for its people.
Nur Bahal
Toronto, Canada
E-Mail:nurb@rom.on.ca
Related Article:
Prime Minister Sharmarke’s Credibility Gap By Liban Ahmad
The Bomber is Alive: Shamo Carnage Revisited By Abdikarim Buh
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News Release Release Date: June 11, 2009 U.S. Labor Department recovers more than $9 million for retirement plans of bankrupt Aloha Airlines San Francisco – The U.S. Department of Labor has entered into settlement agreements with Aloha Airlines Inc., Bank of Hawaii and First Hawaiian Bank, which agreed to pay $9,545,454 to the airline’s three pension plans for losses the plans suffered on investments in stock of the airline’s holding company. Both Aloha and its holding company are bankrupt. The money will be paid to the Pension Benefit Guaranty Corp., the trustee of the plans. The Labor Department contended that Aloha and Bank of Hawaii, as the plans’ fiduciaries, breached their duties under the Employee Retirement Income Security Act (ERISA). They allegedly caused or permitted the plans to buy newly issued stock of the airline’s holding company in September 2000 for more than its fair market value and without investigating the merits of the purchase for the plans, as well as failed to take steps to protect the plans as the stock lost all of its value. In the department’s view, the transaction also was prohibited because there was no purchaser independent of the issuer. Additionally, the department contended that First Hawaiian Bank, which was an investment manager for a portion of the plans’ investments not involved in the transaction, facilitated the stock transaction and therefore knowingly participated in the fiduciary breaches or violated its duties as a co-fiduciary. Under separate settlement agreements, Aloha Airlines has agreed to pay a total of $5.5 million, including $500,000 in civil penalties paid to the federal government. The banks each agreed to pay $2.5 million, for a total of $4,545,454 in restitution and $454,546 in civil penalties. “We will vigorously pursue plan fiduciaries who engage in transactions with employer securities that are prohibited by ERISA,” said Alan D. Lebowitz, deputy assistant secretary for the Labor Department’s Employee Benefits Security Administration (EBSA). In an earlier settlement agreement, in September 2008, PriceWaterhouseCoopers LLP agreed to pay $250,000 to the plans and a $50,000 civil penalty. The Labor Department contended that PriceWaterhouseCoopers, the auditor for the plans and the companies, knowingly participated in the fiduciary breaches. The settlements resulted from an investigation conducted by EBSA’s Los Angeles Regional Office. Employers and workers may contact that office at 626.229.1000 or toll-free at 866.444.3272 for help with problems relating to private sector pension and health plans. In fiscal year 2008, EBSA achieved monetary results of $1.2 billion related to pension, 401(k), health and other benefits for millions of American workers and their families. For information about ERISA enforcement, visit http://www.dol.gov/ebsa/erisa_enforcement.html . U.S. Department of Labor news releases are accessible on the Department's Newsroom page. The information in this news release will be made available in alternate format (large print, Braille, audio tape or disc) from the COAST office upon request. Please specify which news release when placing your request at 202.693.7828 or TTY 202.693.7755. The Labor Department is committed to providing America's employers and employees with easy access to understandable information on how to comply with its laws and regulations. For more information, please visit the Department's Compliance Assistance page.
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www.dol.gov | Telephone: 1.866.4.USA-DOL (1.866.487.2365) | TTY: 1.877.889.5627
SATYAM SAGA
January 24, 2009
PwC auditors held, to be produced in court
New Delhi: The Andhra Pradesh police on Saturday arrested two top officials of auditing firm PricewaterhouseCoopers who worked on the Satyam account, in connection with the financial fraud disclosed by the IT firm's founder Ramalinga Raju.
The state CID arrested PwC's Chief Relationship Partner S Gopalakrishnan and Engagement Leader Srinivas Taluri.
Both Gopal Krishnan and T Srinivas will be produced in the court on Saturday evening. Hyderabad Police sources say that both were arrested by the CB-CID Police on Friday night.
The Special Fraud Investigation Office had also questioned both the auditors before they were arrested by the CB-CID.
The President of the Institute of Chartered Accountants of India, Ved Jain said on Saturday that an arrest of PwC auditors by the state CID cannot be merely for being negligent, but could point to complicity. Jain also said the companies and corporate houses should avoid giving audit work to the chartered accountants against whom ICAI had taken action....
Former Satyam chairman, B Ramalinga Raju, his brother Rama Raju and Satyam's former CFO Vadlamani Srinivas are already in judicial custody awaiting charges to be filed in connection with the Rs 7,800 crore accounting fraud in the IT company....
In January 14, auditors PricewaterhouseCoopers said their opinion on the financials of the beleaguered company may be rendered "inaccurate and unreliable".
In a letter to the new board of Satyam, the audit firm said the statement by the former chairman of the company B Ramalinga Raju, admitting to a multi-crore fraud, may have material effect on the veracity of the firm's financial statements.
"Consequently, our opinions on the financial statements may be rendered inaccurate and unreliable," the three-page letter by the audit firm said.
"We wish to advise that the company should promptly notify any person or entity that is known to relying upon our audit report that our audit opinion should no longer be relied upon."
The letter was sent to the new board comprising Deepak Parekh, chairman of Housing Development Finance Corp (HDFC), Kiran Karnik, former president of the National Association of Software and Service Companies, and C Achuthan, former member of the Securities and Exchange Board of India (SEBI), the markets watchdog.
The three-member board has appointed Deloitte and KPMG as the new joint auditors for Satyam in place of PricewaterhouseCoopers.
After Raju's admission to the major fraud, the inability of PricewaterhouseCoopers in detecting it came under scrutiny with state investigation agencies conducting a raid on its premises at the upscale Jubilee Hills in Hyderabad.
The Madoff Fraud: How Culpable Were the Auditors?
Add the nation's largest accounting firms to the list of watchdogs and regulators that didn't catch the multibillion-dollar Madoff investment scam.
KPMG, PricewaterhouseCoopers, BDO Seidman and McGladrey & Pullen all gave clean bills of health to the numerous funds that invested with Bernard Madoff and his asset-management firm. Clients say the large accounting firms signed off on statements that said the Madoff investment vehicles had billions of dollars in assets as well as an unlikely track record showing years of always-positive returns. The billions have vanished, and the impressive returns now look to have been made up. See the top 10 financial collapses of 2008.
"It's surprising that the auditors for these various funds didn't identify that the underlying assets were not there," says Christopher Wells, a partner at the law firm Proskauer Rose who specializes in hedge funds. "You would think that is something they test."
See full Article.
January 16, 2009
Icai probe of GTB-Price Waterhouse on for 4 years
GTB almost collapsed after it was discovered that the bank was involved in the stock market scam engineered by Ketan Parekh
In 2004, the country’s banking regulator, the Reserve Bank of India (RBI), filed a complaint with Icai, the apex body that regulates accounting firms, after it found differences between the audit firm’s numbers and RBI’s own numbers in the case of Global Trust Bank (GTB).
“The Icai council in 2007 prima facie had found (the) partner of PwC guilty of professional negligence in underproviding for non-performing assets at the erstwhile GTB,’’ an Icai council member said over the phone on Wednesday. “The case was then referred to the (body’s) disciplinary committee.”
Troubled house: The PricewaterhouseCoopers office in Hyderabad. PTI
GTB almost collapsed after it was discovered that the bank was involved in the stock market scam engineered by Ketan Parekh. Price Waterhouse is an arm of audit and consulting firm PricewaterhouseCoopers and was the audit firm of Satyam, whose former chairman B. Ramalinga Raju disclosed last week that he had fudged the company’s books over the years to the tune of at least Rs7,136 crore.The Icai member, who didn’t want to be named because of the sensitivity of the issue, said the body’s disciplinary committee was in advanced stages of its investigation.
“Once they formulate a view, they will pass on the recommendations to the Icai council, which will then take a final decision,” he said, but added that he couldn’t say how much longer that would take.
Price Waterhouse didn’t respond to an email questionnaire on the subject sent to it on Wednesday.
RBI had said in a statement issued in mid-2004 that GTB’s audited balance sheet as on March 2002 showed a net worth of Rs400.40 crore and a profit of Rs40 crore, while its own annual financial inspection of the bank’s position as on 31 March 2002 disclosed a negative net worth.
Lovelock and Lewes was GTB’s accounting firm in fiscal 2001-02, and Price Waterhouse in 2002-03. Following the collapse of GTB in 2003, the bank was taken over by Oriental Bank of Commerce the following year.
Lovelock and Lewes is also part of PwC.
“Subsequent to the events relating to erstwhile GTB, RBI had advised the entities under its regulation that they may consider not to engage PwC for any audit work till further advice,” RBI spokeswoman Alpana Killawala said in an email reply on Tuesday. “RBI had simultaneously referred the matter relating to deficiency in the conduct of statutory audit by PwC to Icai in August 2004 for taking suitable action against the audit firm. The disciplinary proceedings initiated by Icai are still in progress.”
RBI reinstated the audit firm effective 1 April 2008 after Price Waterhouse made a representation to the central bank in October 2007 “requesting for reinstatement as they had already been penalized by denial of audit for more than three years”, she added.
Explaining the time taken for the GTB probe, the Icai council member said, “Icai has been formed by an Act of Parliament and there are some laid down procedures to follow.” He listed some of these procedures: seeking replies from the accused and counters from the complainant (at least twice in the GTB case), calling the complainant and the accused and providing an opportunity for cross examination; and submitting recommendations to Icai’s council.
This person added that there were many parties involved in the GTB case and that getting information is “a time-consuming exercise... It will be wrong to say we didn’t take action in the last three years. The Icai has taken action against 122 auditors”.
Mint couldn’t immediately ascertain when investigations into these cases began.
anita.b@livemint.com
http://www.livemint.com/gtbprobe.htm
Enron, AIG, PricewaterhouseCoopers and today’s Barbados Offshore Companies
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I was ribbed for omitting to mention two scandals in a recent post, PwC has other problems besides Nelson’s Canadian $500 million law suit! The omitted scandals were PricewaterhouseCoopers’ involvement in both the Enron and the AIG sagas. Enron was linked to companies in the Caymans, but Barbadian offshore reinsurance companies were involved with AIG. Were these “shell corporations“? Would they be found in the Barbadian Corporate Registry (CAIPO)? The named companies were Union Excess Reinsurance Co. and Capco Reinsurance Co. Ltd.... |
May 19, 2009
AIG investors to get
$843 million: SEC
WASHINGTON (Reuters) - A federal court has approved the distribution of more than $843 million to harmed investors at insurer American International Group, the U.S. Securities and Exchange Commission said on Tuesday.
The court estimates that checks will soon be mailed to more than 257,000 AIG investors that were affected by an alleged accounting fraud at the company, the SEC said.
AIG, which has been propped up by billions of dollars in taxpayer funds, was charged with accounting fraud in 2006. The SEC alleged that the insurer falsified its financial statements from at least 2000 until 2005 and reported misleading information about its financial condition.
The company, which did not admit or deny the allegations, had repaid its ill-gotten gains, as well as penalties to the government. In 2007, a federal court authorized the SEC to establish a 'fair fund' to distribute the money to harmed AIG investors.
"The commission continues to utilize the tools that Congress provided to ensure that funds are returned to harmed investors to the greatest extent possible," said Dick D'Anna, director of the SEC's office of collections and distributions, in an agency statement.
See also > > > AIG: The American Idol of Greed; Confessions of a Whistleblower; The Buzzards In Charge of the AIG Bailout; Googling for AIG + PWC; RICO in Paradise; Googling for Fraud + PricewaterhouseCoopers; Googling for PricewaterhouseCoopers + Tyco+Fraud; Googling for PricewaterhouseCoopers+Catbird+Seat +fraud
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