Satyam scandal fallout: SEBI bars PriceWaterhouse from corporate audits for two years
Янв 14 2018 by Desiree Burns
In addition, the regulator ordered PwC to relinquish wrongful gains of about US$2 million and 12% annual interest for the past eight years.
The order states that PW and audit firms in its network can not issue audit certificates directly or indirectly, but it will not impact the audits taken up for the 2017-18 financial year.
"Any enforcement measure taken by Sebi with a preventive and remedial object, as envisaged under Section 11B of the Sebi Act, would not serve the goal unless the directions bring within its fold the PW network operating in India".
Sebi said PW firms benefited from the relationship with Satyam Computers by having collectively received a fee of Rs 23.31 core during 2000-08.
The SEBI order comes nearly seven years after the U.S. Securities and Exchange Commission (SEC) agreed to a $6 million settlement over charges against Indian affiliates of Price Waterhouse related to deficient auditing of Satyam. While making it clear that it will appeal against the Sebi order next week, Price Waterhouse (PW) also comforted around 3,000 auditors, saying that it will take care of their interest and there was no reason to worry.
"Listed companies who are being audited may think of moving to other auditors due to the uncertainty, even if Price Waterhouse manages to get a stay order", said Shriram Subramaniam, who is founder of proxy advisory InGovern.
After consent pleas were rejected, PW had approached the Supreme Court challenging Sebi's jurisdiction over auditors.
"The SEBI order relates to a fraud that took place almost a decade ago in which we played no part and had no knowledge of".
The audit major also said it has learnt the lessons from Satyam case and invested heavily over the last nine years in building a robust and high quality audit practice.
"As we have said since 2009, there has been no intentional wrongdoing by PW firms in the unprecedented management perpetrated fraud at Satyam, nor have we seen any material evidence to the contrary", Price Waterhouse said in a statement.
The Wall Street Journalreported that PwC was in charge of auditing Satyam's accounts at the time its founder, B. Ramalinga Raju, admitted that he had boosted revenue by forging bank documents and inflating sales figures. The public had no reason to believe that the audit reports were false and misleading. In 2012, Satyam was sold to rival Tech Mahindra which dropped the brand.
The Indian authorities said that, from 2003 onwards, Satyam's sales revenues were inflated by accounting for 7,561 fake invoices, and Price Waterhouse failed to check the veracity of the monthly bank statements.
При любом использовании материалов сайта и дочерних проектов, гиперссылка на обязательна. «» 2007 - 2018 Copyright. Автоматизированное извлечение информации сайта запрещено.