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Nachiket Kelkar
Nachiket Kelkar

SATYAM SCAM

SAT refuses to stay SEBI's two year auditing ban on PwC

PWC-INDIA/SEBI [File] Representative image | Reuters

The Securities Appellate Tribunal has refused to grant any stay on the two-year audit ban on Price Waterhouse by Securities and Exchange Board of India in relation to the accounting scam at Satyam Computer Services.

The SAT, however, said that the firm can continue to audit existing clients, whose accounting year has begun from January 1. The next hearing in the case scheduled on February 13.

Last week, market regulator SEBI had banned Price Waterhouse from doing audit work for any listed company for two years, holding it guilty in the Rs 8,000 crore Satyam Computer case in 2009.

"Entities/firms practicing as chartered accountants in India under the brand and banner of PwC shall not directly or indirectly issue any certificate of audit of listed companies, compliance of obligation of listed companies and intermediaries registered with SEBI for a period of two years," the order passed by G. Mahalingam, whole time member of SEBI had said.

SEBI had also barred two former PwC partners, S. Gopalakrishnan and Srinivas Talluri, from directly or indirectly issuing any audit certificate of listed companies for three years.

Further, PwC and the two former partners had also been asked to pay Rs 13.09 crore along with interest at 12 per cent per annum from January 2009.

PwC had approached the SAT, appealing the SEBI order be lifted. However, SAT has only given a relief to the extent that it can complete audit assignments undertaken for the financial year 2017-18 and it can also continue auditing firms, whose accounting year has begun from January 1, 2018.

SEBI had received an email dated January 7, 2009 from B. Ramalinga Raju, then chairman of Satyam Computer Services, admitting large scale manipulations in the books of account of Satyam Computer. PwC was the statutory auditor of the company from April 1, 2000.

SEBI's investigation found that certain Satyam directors and employees had connived and collaborated in the overstatement, fabrication, falsification and misrepresentation in the books of account and financial statements of Satyam Computer.

PwC has said earlier that it played no part and had no knowledge of the fraud at Satyam nearly a decade ago.

“As we have said since 2009, there has been no intentional wrong doing by PwC firms in the unprecedented management perpetrated fraud at Satyam, nor have we seen any material evidence to the contrary,” it has said.

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Topics : #SEBI

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