Price Waterhouse intends to challenge the Securities and Exchange Board of India’s order imposing a two-year auditing ban on the firm in the case involving fraud at Satyam Computer Services.
In an 108-page order released late on Wednesday, SEBI directed the auditing firm and two of its partners — S. Gopalakrishnan and Srinivas Talluri — to disgorge ₹13.09 crore along with 12% interest per annum since January 2009. Mr. Gopalakrishnan and Mr. Talluri were partners at Price Waterhouse, Bangalore, and signed the accounts of Satyam. While Mr. Gopalakrishnan signed the accounts between April 2000 and March 2007, Mr. Talluri did it between April 2007 and September 2008.
‘Unprecedented fraud’
“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. “We are confident of getting a stay before this order becomes effective.”
SEBI had in February 2009 issued a show-cause notice to Price Waterhouse, among other entities, after it emerged that Satyam’s accounts were falsified.
The SEBI order comes almost 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.
The audit firm stands a better chance of getting a stay if it approaches the Securities Appellate Tribunal (SAT) instead of a court, said Sandeep Parekh, founder, Finsec Law Advisors and a former SEBI law officer. While SAT would review the matter’s merits, a “court will only look at the legalities of the case,” he opined.
