Satyam scam: SEBI bars Price Waterhouse from auditing any Indian listed company for two years
The firm said it was disappointed with market regulator’s order.
India’s market regulator, the Securities and Exchange Board of India, has barred Price Waterhouse from auditing any listed company in India for two years for its alleged role in the 2009 Satyam scam, PTI reported.
The regulator also asked Price Waterhouse to pay Rs 13.09 crore, with a 12% interest per annum since January 2009.
The bench also batter two former Price Waterhouse partners, S Gopalakrishnan and Srinivas Talluri, from issuing audit certificates to listed companies for three years, The Times of India reported. Both chartered accountants were in charge of auditing Satyam when the fraud came to light.
The ban will be effective from the financial year 2018-’19 and will not affect auditing work for 2017-’18, the report said.
“Entities/firms practicing as chartered accountants in India under the brand and banner of PW shall not directly or indirectly issue any certificate of audit of listed companies, compliance of obligations of listed companies and intermediaries registered with SEBI...for a period of two years,” SEBI said in its 108-page order, according to The Hindu.
The scam
The Satyam scam was unearthed in 2009, after the then Chairman of Satyam B Ramalinga Raju admitted in a letter to overstating the company’s assets by Rs 5,040 crore. Shareholders lost nearly Rs 14,000 crore as a consequence.
In 2010, SEBI issued a show cause notice to Price Waterhouse and several other entities. In 2015, a special court in Hyderabad sentenced Raju to seven years rigorous imprisonment. In September 2017, Price Waterhouse had moved a consent plea with SEBI to settle the investigations related to its role in the Satyam scam.
Late on Wednesday, Price Waterhouse responded to the regulator’s ruling, saying it was “disappointed”.
“The SEBI order relates to a fraud that took place nearly a decade ago in which we played no part and had no knowledge of,” the firm said. “As we have said since 2009, there has been no intentional wrong doing by PW firms in the unprecedented management perpetrated fraud at Satyam, nor have we seen any material evidence to the contrary.”
The firm said it was “confident of getting a stay” as the SEBI order was “not in line with the directions of the Bombay High Court order of 2011”.