Satyam case: SAT refuses to stay Sebi ban on Price Waterhouse

The Securities Appellate Tribunal today refused to grant a stay on the two-year Sebi ban imposed on Price Waterhouse (PW) and its network entities from taking up new audit work for listed companies.
On January 10, the markets watchdog Sebi passed an order against the audit major for its alleged complicity in the multi-crore Satyam Computer Services scam.
Posting the matter for further hearing on February 13, SAT however clarified that PW and its networking entities can continue serving its existing clients.
"We are happy that SAT has expressed its intention to resolve our appeal against Sebi on an expedited basis, and 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," PW said in a statement.
On finding it guilty in the Satyam fraud, Sebi has restrained 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 regulator's order.

At the hearing today, SAT refused to stay the ban, saying it will hear the matter next on February 13.
However, the two-member SAT bench observed that 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 that audit assignments already undertaken by PW for clients who follow the financial year beginning on January 1, 2018 would not be impacted by the Sebi order.
"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.
"Appellants are directed to give list of existing clients before this tribunal along with affidavit with an advance copy to respondent (Sebi)," SAT said.

It also said the appellants shall be at liberty to complete various kinds of such certification work with them as on date.
"Details of such existing work over and above the audit assignments shall also be reflected in the affidavit to be filed by the appellants within a period of ten days," the tribunal noted.
Sebi's counsel said it has been clarified in the regulator's order itself that the directions contained would not affect the ongoing audit assignments of the PW till March 31, 2018.
The regulator has been granted time till February 8 to file its reply.
In its 108-page order, Sebi has also directed disgorgement of over Rs 13 crore wrongful gains by the auditing major and its 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.
Sebi has imposed a two-year ban on entities/ firms practising as chartered accountants under the brand and banner of PW from directly or indirectly issuing any certificate of audit of listed companies, compliance of obligations of listed companies and intermediaries registered with the regulator.
According to the regulator, 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, its two erstwhile partners, S Gopalakrishnan and Srinivas Talluri, were restrained from directly or indirectly issuing any certificate of audit of listed companies, compliance of obligations of listed companies and intermediaries registered with Sebi for three years.
In today's statement, PW also said that over the years, "our stakeholders have witnessed the huge investment we made in tools, training and infrastructure and we remain committed to maintaining the highest standards of quality in our services".
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.