9 years after Satyam scam, Price Waterhouse banned from audit for 2 years

Nine years after Satyam scam, Sebi orders Rs 130.9-million disgorgement; audit firm says it is confident of getting order stayed

9 years after Satyam scam, Price Waterhouse banned from audit for 2 years

The Securities and Exchange Board of India (Sebi) late on Wednesday banned Price Waterhouse (PW) from providing audit services to listed companies and market intermediaries for two years in the Satyam fraud case. Two PW partners have been banned for three years. | Today’s Paper

The regulator also imposed a disgorgement of Rs 130.9 million on Price Waterhouse, and two of its chartered accountants — S Gopalakrishnan and Srinivas Talluri. The three entities also have to pay 12 per cent interest on the disgorgement amount since January 7, 2009, in 45 days from the date of the order.

Further, it said that no listed company or intermediary registered with Sebi to be engaged with any audit firm associated with the PW network for issuing any certificate with respect to compliance of statutory obligations which Sebi is competent to administer and enforce, under various laws for a period of two years.

These entities have been charged under Sebi’s prohibition of Fraudulent and Unfair Trade Practices (FUTP) regulation. “I find that the auditors have failed in showing any evidence to the effect that they had done their job with standards of professional duty and care as required. The auditors were well aware of the consequences of their omissions which would make such accumulated and aggregated acts of gross negligence scale up to an act of commission of fraud for the purposes of the Sebi Act and the Sebi (FUTP) regulation,” said G Mahalingam, wholetime member, Sebi, in a 108-page order.

The case dates back to 2009, when chairman of Satyam Computer Services (Satyam) B Ramalinga Raju admitted and confessed to large scale financial manipulations in Satyam’s book of accounts to the tune of Rs 50.4 billion. Soon after this, Sebi initiated investigation and later on issued showcause notices to PW and its associates in February 2009. Further notices were issued to PW in 2012 under FUTP regulations. Sebi, which has been probing PW for nearly a decade, and was asked by the Supreme Court in January 2017 to expedite the matter, held a series of hearings with the auditing major and its officials during May-June this year. The Supreme Court had directed Sebi to complete in six months its enquiry proceedings against PW.

Click here to read → Satyam Scam

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s