The Securities and Exchange Board of India (SEBI) barred Price Waterhouse after the company was convicted in the Satyam Scam case. This order restricts Price Waterhouse from auditing any listed company in India for the next two years. The regulator directed the auditing firm to give Rs. 13.09 crore with 12% interest per annum since January 2009.
On Wednesday, the SEBI released a 108 page order that read, “Entities/firms practicing as Chartered Accountants in India under the brand and banner of PW (Price Waterhouse), shall not directly or indirectly issue any certificate of audit of listed companies, compliance of obligations of listed companies and intermediaries registered with SEBI… for a period of two years.”
Price Waterhouse was extremely disappointed by the SEBI’s findings. Price Waterhouse’s spokesperson in an email response said, “We are disappointed with the findings of the Sebi investigations and the adjudication order. The Sebi order relates to a fraud that took place nearly a decade ago in which we played no part and had no knowledge of.”
The auditing company’s spokesperson further added, “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.”
The email further read, “We believe that the order is also not in line with the directions of the Hon’ble Bombay High Court order of 2010 and so we are confident of getting a stay before this order becomes effective.”
The Price Waterhouse company is speaking about the August 2010 order from the High Court. This order stated no directions could be issued against the company if there is only a bit omission without any proof of fraud.
Back in January 2009, this fraud surfaced after the then Chairperson of Satyam Computers B. Ramalinga Raju confessed in a letter. The Chairperson admitted to inflating revenue profit over several years. This was categorized under an accounting fraud and amounted to a total of Rs. 7,136 crore making it the biggest accounting fraud case in India.
