The final order by the Securities and Exchange Board of India (SEBI) against Price Waterhouse in the Satyam matter may be delayed as both the capital market regulator and the audit firm want to seek an extension of the July deadline set by the Supreme Court in January.
While the SEBI wants the apex court to extend the July deadline by three months to complete the probe, Price Waterhouse favours an extension by more than three months, according to persons directly involved in the matter. The case will come up for hearing on July 5.
The Supreme Court, on January 10, directed SEBI to expedite the enquiry against the audit firm and conclude the probe within six months. The regulator is examining allegations related to alleged negligence and professional lapses by the audit firm while rendering services to the erstwhile IT major.
The regulator has already submitted a statement in the Supreme Court seeking an extension of the deadline. The counsels for Price Waterhouse will support the plea for extension but are likely to ask for more than three months.
“We are at the fag end of the Supreme Court deadline but the cross-examination is far from over,” said a person directly involved in the matter. “Post that, the evidence will be assessed and then there will be personal hearings. We believe the matter needs at least 15-20 more weeks to conclude. While SEBI plans to seek a three-month extension, Price Waterhouse wants a little more than three months.”
Cross-examination
The audit firm wants to cross-examine some of the witnesses based on whose statements the regulator is proceeding with the probe. Incidentally, last week, the auditor managed to get an approval for the cross-examination of a few witnesses by way of a direction by the Securities Appellate Tribunal.
The case goes back to 2010 when SEBI issued a show-cause notice to Price Waterhouse, among many other entities, after it emerged that the accounts of Satyam were falsified and inflated. This followed the letter written in January 2009 by the then chairman of Satyam, B. Ramalinga Raju in which he said that the balance sheet of the company included inflated and non-existent cash and bank balances.
