Nine years after Satyam scam, Sebi orders Rs 130.9-million disgorgement; audit firm says it is confident of getting order stayed
The Securities and Exchange Board of India (Sebi) late on Wednesday banned Price Waterhouse (PW) from providing audit services to listed companies and market intermediaries for two years in the Satyam fraud case. Two PW partners have been banned for three years.
The regulator also imposed a disgorgement of Rs 130.9 million on Price Waterhouse, and two of its chartered accountants — S Gopalakrishnan and Srinivas Talluri. The three entities also have to pay 12 per cent interest on the disgorgement amount since January 7, 2009, in 45 days from the date of the order.
Further, it said that no listed company or intermediary registered with Sebi to be engaged with any audit firm associated with 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.
These entities have been charged under Sebi’s prohibition of Fraudulent and Unfair Trade Practices (FUTP) regulation. “I find that the auditors have failed in showing any evidence to the effect that they had done their job with standards of professional duty and care as required. The auditors were well aware of the consequences of their omissions which would make such accumulated and aggregated acts of gross negligence scale up to an act of commission of fraud for the purposes of the Sebi Act and the Sebi (FUTP) regulation,” said G Mahalingam, wholetime member, Sebi, in a 108-page order….Read More