Securities Appellate Tribunal Refuses To Lift SEBI Ban On Price Waterhouse
The SAT clarified that the audit major and its networking entities can continue serving its existing clients.
The Securities Appellate Tribunal today refused to grant a stay on the two-year SEBI ban on audit major Price Waterhouse (PW) to undertake new clients.
Posting the matter for further hearing on Feb. 13, the SAT, however, clarified that the audit major and its networking entities can continue serving its existing clients.
On finding it guilty in the Satyam fraud, SEBI had passed an order on Jan. 10, restraining PW and its network entities from issuing audit certificates to any listed company in the country for two years. Subsequently, PW and its network firms moved the tribunal against the market regulator's order.
While it refused to lift the ban, the two-member SAT bench observed that the SEBI order "shall not come in the way of audit assignments undertaken by PW and it network firms for fiscal 2017-18".
The tribunal also clarified those audit assignments already undertaken by PW for clients who follow the financial year beginning on Jan. 1, 2018, would not be impacted by the SEBI order.
SAT has set an “expectation of a tight timeline of six weeks to dispose the appeal. The clarification that current engagements can continue through the year, is welcome,” the audit firm said in a emailed statement following the tribunal’s decision. “We remain committed to maintaining the highest standards of quality in our services,” PW added.
“Similarly PW shall be at liberty to complete any other work of certification (besides audit) already in their hands,” SAT said. However, it said PW and its network firms “shall not take new assignments and new clients” adding that the audit firm has to submit a list of its existing clients before the tribunal as well as a copy of the same to SEBI.
In a 108-page order, SEBI had also directed disgorgement of over Rs 13 crore wrongful gains by the auditing major and it's two erstwhile partners who worked on the IT company's accounts.
On Jan. 11, PW said there had been no intentional wrongdoings by its firms and partners in the Satyam case and had expressed confidence of getting a stay on the Sebi order.
The market regulator has imposed a two-year ban on entities/firms practicing as chartered accountants under the brand and banner of PW from directly or indirectly issuing any certificate of an audit of listed companies, compliance of obligations of listed companies and intermediaries registered with the regulator.
In a 108-page order, SEBI had also directed disgorgement of over Rs 13 crore wrongful gains by the auditing major and it's two erstwhile partners who worked on the IT company's accounts.
On January 11, PW said there had been no intentional wrongdoings by its firms and partners in the Satyam case and had expressed confidence of getting a stay on the Sebi order.
The market regulator has imposed a two-year ban on entities/firms practicing as chartered accountants under the brand and banner of PW from directly or indirectly issuing any certificate of an audit of listed companies, compliance of obligations of listed companies and intermediaries registered with the regulator.
SEBI had noted that its order would not impact audit assignments relating to the financial year 2017-18 undertaken by the firms forming part of the PW network. Further, the two erstwhile partners, S Gopalakrishnan and Srinivas Talluri, were restrained from directly or indirectly issuing any certificate of the audit of listed companies, compliance of obligations of listed companies and intermediaries registered with SEBI for three years.
The scam came to light in January 2009 after Satyam Computer's then chairman B Ramalinga Raju admitted to large-scale financial manipulations in the company's books of accounts.