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The Securities and Exchange Board of India (SEBI) on Wednesday said its actions against auditors for faulty audits are within its “Parliamentary mandate”, and there is no question of “turf wars” on this issue.
SEBI Chairman Ajay Tyagi said the watchdog is working only to protect the interests of investors and limiting its actions to auditors of publicly listed firms.
In 2018, the regulator banned Price Waterhouse for two years from auditing any listed firm for its role in the Satyam Computer Services scam. However, the audit firm had successfully challenged the same in the Securities Appellate Tribunal (SAT) and got the order quashed.
In November, the Supreme Court stayed a SAT order which had held that SEBI does not have the power to bar auditors.
“Our position is very simple -- if they’re auditing listed companies based on which investors are investing, and if we find that that work has not been done properly and in investors’ interest, some audit firms should not be allowed to audit for sometime of the listed companies,” Tyagi said at an event here.
“It is our parliamentary mandate I would say to see that it is done and there is no trouble there. It goes to the basic issue of investor protection being the parliamentary mandate of SEBI,” he noted.
According to Tyagi, audit firms are important gatekeepers who help companies put out results and financial performance to the stock exchanges, based on which investors take the call whether to invest or not.
“It is not our case that SEBI is the agency which registers or regulates the auditors. It is nothing like that. We are not de-registering auditors. We don’t have the authority and we don’t wish to have that authority, he said.
He also made it clear that SEBI’s expectation is that faulty audits should not lead to inflated profits or dividends.
Regarding IPO market, Tyagi said there has been an improvement in activities lately and that nearly a dozen issues of over Rs 15,000 crore are in the pipeline.
The regulator has given its wishlist for the budget to the finance ministry, includes ways to increase the activities in the corporate bond market, he said.
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