Info-tech

Satyam scam: SEBI bans PwC from auditing listed firms for 2 years

Our Bureau Mumbai | Updated on March 09, 2018 Published on January 11, 2018

Orders disgorgement of over Rs 13 crore of wrongful gains from the auditing firm and its two erstwhile partners

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.

SEBI has also ordered the disgorgement of over Rs 13 crore of wrongful gains from the auditing firm and its two erstwhile partners who worked on the IT company’s accounts.

Price Waterhouse Bangalore and its two erstwhile partners — S. Gopalakrishnan and Srinivas Talluri — have been directed to jointly and severally disgorge the wrongful gains of “Rs 13,09,01,664 with interest calculated at the rate of 12 per cent per annum from January 7, 2009 till the date of payment”. They have to pay the amount within 45 days.

Coincidentally, SEBI order has come in the same month as the then Satyam chief Ramaliga Raju’s admission of guilt to SEBI on January 7, 2009. The order comes nine years after the scam at Satyam Computer Services first came to light and after two failed attempts by PwC to settle the case through the consent mechanism.

“We are disappointed with the findings of the SEBI investigations and the adjudication order... we are confident of getting a stay before this order becomes effective,” PwC said in a statement.

SEBI has said its order will not impact the audit assignments relating to the fiscal year 2017-18 undertaken by the firms forming part of the PwC network.

The regulator said the objective of insulating the securities market from such fraudulent accounting practices perpetrated by an international firm of repute will be ineffective if the directions do not bring within its sweep the brand name PwC. The network structure of operations adopted by the international accounting firm should not be used as a shield to avoid legal implications arising out of the certifications issued under the brand name of the network, the order said.

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Published on January 11, 2018
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