SembCorp found cooking up accounts Enron-like fashion

Venkatachari Jagannathan
08 October 2003

Chennai: Overloading of trucks by individual operators is common in India. But overloading of company''s account books with fishy numbers?

At SembCorp Logistics India, under the watchful eyes of PricewaterhouseCoopers India and KPMG Consulting, Singapore, the company''s external and internal auditors, respectively, accounts have been cooked up Enron-like fashion.

The city-based SembCorp Logistics India is a wholly owned subsidiary of Singapore company SembCorp Logistics (SembLog). Another group company is Fracht Forwarding & Travels, a freight forwarding company. SembCorp Logistics has also promoted a logistics joint venture Ceylinco SembCorp Integrated Logistics, Sri Lanka.

The Singapore company has uncovered accounting anomalies after internal checks on its own and has decided to take legal recourse against the accounting firms as they failed to detect this for several years.

In India the company has hired Ernst & Young in the place of PricewaterhouseCoopers India while dispensing with the internal audit services of KPMG Consulting. KPMG Consulting audits the parent company. Sources say KPMG Consulting became the internal auditors after SembLog acquired full control of the company from Shriram group the erstwhile joint venture partner.

In 2001, after the exit of the management team at SembCorp Logistics India, the Singapore company sent Cheng Kong Meng as the Indian company''s managing director. The hole in the number game came out when another Singaporean was sent as deputy managing director in 2003. It was he who found out some irregularities and sounded out the parent company SembLog.