Thursday, January 11,
2018 09.28AM / TimesOfIndia
In one of the most stringent orders passed by any
regulator against a Big Four auditor, SEBI had on Wednesday found PwC guilty in
the Satyam scam and barred its network entities from issuing audit certificates
to any listed company in India for two years.
Markets regulator Sebi on Wednesday
banned global auditing firm Price Waterhouse Network from engaging in audit
work with any listed company for two years starting April 2018 for its role in
the Rs 8,000-crore Satyam
scam that took place in 2009.
The regulator also asked PW to pay Rs 13.09 crore,
along with interest at 12% per annum from January 2009 (approximately Rs 14
crore).
Two former PW partners, S Gopalakrishnan and Srinivas
Talluri, have also been barred from issuing audit certificates to listed
companies for three years. The two chartered accountants were responsible for
auditing Satyam when the fraud came to light.
Price Waterhouse Network is auditing arm of PWC India.
"Listed companies and intermediaries registered
with Sebi shall not engage any audit firm forming part of 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," the 108-page order said. This order could impact
PW's audit business in India. The audit firm was yet to offer any statement at
the time of going to press.
The ban will come into effect from financial year
2018-19 and won't affect the auditing work for the year 2017-18.
Late Wednesday evening, Price Waterhouse Network
issued a statement saying, "We are disappointed with the findings of
the Sebi investigations and the adjudication order. 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. 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. We believe that the
order is also not in line with the directions of the Hon'ble Bombay High Court
order of 2011 and so we are confident of getting a stay before this order
becomes effective."
In September 2017, PW had moved a consent plea with
Sebi to settle the investigations relating to its role in the Satyam scam. In
2009 too, the firm had filed a consent plea with Sebi which was rejected by the
regulatory body.
The PW statement also said: "We have learnt the
lessons of Satyam and invested heavily over the last nine years in building a
robust and high quality audit practice, as also confirmed in 2015 by an
independent monitor appointed by the US SEC."
Sebi has been investigating the role of the auditing
firm, Price Waterhouse Bangalore, which audited Satyam Computers between 2000
and 2008. The regulator was probing if two of PW's partners had played a role
in concealing the scam that came to light in January 2009 when Satyam founder B
Ramalinga
Raju, through letters to the bourses, admitted to have fudged the books for
several years.
The regulator's objective was to prove fraud or
connivance of the PW partners with the promoters of Satyam in fudging the
company's books. Subsequently, PW had moved the Supreme Court challenging
Sebi's jurisdiction and authority in starting an investigation against the
audit firm. The apex court allowed Sebi to go ahead with its investigations.
In 2017, Sebi got two extensions from the SC to
complete its investigations in the case.
Credits: Times of India
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