Sarma: Sentinel

New Delhi, Jan. 9: Former Union revenue secretary E.A.S. Sarma known to have been one of the toughest officers in the finance ministry has shot off letters to the Sebi chief and the ministry of corporate affairs seeking “discreet” probes against firms other than Satyam audited by Price Waterhouse.

He has also sought investigations into the affairs of companies whose stocks were the favourites of rogue broker Ketan Parekh.

Sarma’s letter, a copy of which is with The Telegraph, states that “now that Price Waterhouse has been found to be involved in auditing many similar dubious companies, DCA/Sebi should identify all the companies audited by that firm and order a discreet enquiry. Also, both DCA/Sebi should look into the affairs of all the companies involved in the Ketan Parekh affair”.

The former IAS officer, who lives in Vijayawada and runs an NGO, told on the phone, “The entire Satyam saga is a land scam, where the state government helped, which has turned into a tragedy for investors and employees.”

Sarma said he had written a series of letters to Sebi and the ministry of corporate affairs on a co-ordinated probe into Satyam in early December before the Maytas scam came out in the open. However, no action was taken then.

The probe should now be widened to see whether other firms were perpetuating similar frauds.

“The auditor of Satyam’s accounts, Price Waterhouse, was involved in auditing the accounts of Global Trust Bank (GTB) which had also collapsed like Satyam a few years ago. The regulators allowed the promoters of GTB to get off the hook and siphon off funds. They also permitted Price Waterhouse to continue to make merry on the Indian turf. I understand that Price Waterhouse has employed the kith and kin of some important figures in the government today,” Sarma’s letter states.

The letter has come as a major embarrassment for the department of company affairs (DCA) and Sebi. The joint parliamentary committee (JPC) probing the 2001 stock market scam had indicted both Sebi and the department for failing to take timely action.

According to the JPC, Sebi had failed to detect irregularities and defuse them.