Satyam scam: SEBI bans PwC from auditing listed firms for 2 years

Satyam scam: SEBI bans PwC from auditing listed firms for 2 years

With SEBI barring all all the firms in the Price Waterhouse network from auditing listed companies for two years, the verdict is undoubtedly going to send shockwaves in auditing circles.

Price Waterhouse Bangalore and its two erstwhile partners - S. Gopalakrishnan and Srinivas Talluri - have been directed to jointly and severally disgorge the wrongful gains of "Rs 13,09,01,664 with interest calculated at the rate of 12 per cent per annum from January 7, 2009 till the date of payment".

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 order comes into force with immediate effect.

SEBI has said its order will not impact the audit assignments relating to the fiscal year 2017-18 undertaken by the firms forming part of the PwC network.

Price Waterhouse had earlier approached the Supreme Court challenging Sebi's jurisdiction over auditors.

Late on Wednesday, Price Waterhouse responded to the regulator's ruling, saying it was "disappointed".

Legal & General Group Plc (LGEN.L) Moving 0.40% in Session
It improved, as 4 investors sold IMI plc shares while 5 reduced holdings. 12 funds opened positions while 13 raised stakes. Keller Group plc provides geotechnical solutions in North America, Europe, the Middle East, Africa, and the Asia-Pacific.

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 order related to a fraud that took place almost a decade ago in which it played no part and had no knowledge of, it said.

"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 Satyam scam arose when Ramalinga Raju, founder of the erstwhile Satyam Computer Services Ltd, admitted that he had padded the books of the software services giant for several years by nearly Rs 7,000 crore.

The Wall Street Journal reported 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.

Coincidentally, SEBI order has come in the same month as the then Satyam chief Ramaliga Raju's admission of guilt to SEBI on January 7, 2009. The company was bought by Tech Mahindra, another outsourcing company.

Shares of Satyam were also listed in the US. It doesn't include 2017/18 audits for listed companies which are already in progress. The public had no reason to believe that the audit reports were false and misleading. A senior chartered accountant said the impact of the SEBI ruling on the auditing business of PW network firms and others can not be assessed immediately.

Related Articles

  • USA  says inter-Korean talks would be limited to Olympics

    USA says inter-Korean talks would be limited to Olympics

    South Korea's Defence Ministry has said it had yet to see any evidence of an imminent missile launch. His statement was followed by the move for North-South talks, and then the suspension of the U.S.
    Delta Air Lines (DAL) Releases Q1 Earnings Guidance

    Delta Air Lines (DAL) Releases Q1 Earnings Guidance

    Buckingham Research has "Buy" rating and $54 target. (NYSE:DAL) has "Outperform" rating given on Thursday, March 16 by Evercore. Lsv Asset reported 3.91 million shares. 972.68 million shares or 1.58% less from 988.30 million shares in 2017Q2 were reported.
    I'm ready for Australian Open -Wawrinka

    I'm ready for Australian Open -Wawrinka

    The closest Safwat came to qualifying was at Wimbledon in 2016 when he won two matches before losing in the final round. Overall, I'm quite happy with my level.
  • Washington Real Estate Investment (WRE) Awesome Oscillator Trending Lower Past 5 Bars

    The real estate investment trust reported $0.34 EPS for the quarter, beating analysts' consensus estimates of $0.31 by $0.03. Following the completion of the sale, the insider now owns 98,973 shares of the company's stock, valued at $3,574,904.76.
    Fiat Chrysler to invest $1 billion in MI  - adding 2'500 new jobs

    Fiat Chrysler to invest $1 billion in MI - adding 2'500 new jobs

    Jeep is one of several brands in an FCA portfolio that also includes luxury Maseratis, sporty Alfa Romeos and mass-market Fiats. The company has a market capitalization of $13.24 billion, a P/E ratio of 8.05 and a beta of 1.78.

    (NYSE:COG) Expected to Earn FY2017 Earnings of $0.43 Per Share

    Currently, the stock carries a price to earnings ratio of 0, a price to book ratio of 0, and a price to sales ratio of 2.78. Following the completion of the sale, the chairman now owns 2,887,018 shares in the company, valued at $80,605,542.56.
  • Analyst Commentary On Express Scripts Holding Company (ESRX), Advaxis, Inc. (ADXS)

    Moneta Invest Advisors Limited Liability has invested 0.08% of its portfolio in Express Scripts Holding Company (NASDAQ: ESRX ). Ontario - Canada-based National Bank Of Nova Scotia has invested 0.04% in Express Scripts Holding Company (NASDAQ: ESRX ).
    Government to resume processing DACA renewals, citing judge's ruling

    Government to resume processing DACA renewals, citing judge's ruling

    The Department of Justice has indicated it will appeal the judge's decision, a move that could again put the program on hold. As of September , about 700,000 people are now protected under the program.
    Aaron Finch century takes Australia past 300 in first ODI against England

    Aaron Finch century takes Australia past 300 in first ODI against England

    Australia may go into the opener at the MCG as favourites but Morgan has vowed to stick to the approach Bayliss has cultivated. During the same period, Australia reached 300 12 times in 50 matches, including 10 out of 23 matches batting first.
  • Federal judge blocks Trump's attempt to let DACA expire for current recipients

    Federal judge blocks Trump's attempt to let DACA expire for current recipients

    The agency will not be accepting new applications from immigrants who may have been eligible for the program, but never applied. Trump gave Congress six months to find a way to allow immigrant approved for the DACA program to remain in the USA permanently.
    There is water on Mars and it's easily accessible

    There is water on Mars and it's easily accessible

    But the size and location of the frozen water has been uncertain, and no robotic probes have yet been able to find or extract any samples from the surface of our planetary neighbor.
    Watford earn late draw with a seeming handball goal

    Watford earn late draw with a seeming handball goal

    I think we have to try the technology because in every single team sport the technology helps us to make better decision and why not football.