In the wake of the infamous Satyam scam, The Securities and Exchange Board of India (Sebi) on Wednesday banned all the firms in the Price Waterhouse network (PW firms from auditing listed companies. The ban on the PW firms would be for two years.
In the wake of the infamous Satyam scam, The Securities and Exchange Board of India (Sebi) on Wednesday banned all the firms in the Price Waterhouse network (PW firms from auditing listed companies. The ban on the PW firms would be for two years.
Sebi found the Price Waterhouse firms guilty in the nine-year-old Rs 7,136 crore Satyam Computer Services Ltd scam. The market regulator in its 108-page order said the firm was complicit with the main perpetrators of the accounting fraud and did not comply with auditing standards.
"The network structure of operations adopted by the international accounting firm should not be used as a shield to avoid legal implications arising out of the certifications issued under the brand name of the network," SEBI said.
Ramalinga Raju, founder and former chairman of the erstwhile software services exporter Satyam Computer Services, stunned Indian markets and investors in January 2009, when he admitted that the firm had overstated earnings and assets for several years, in a fraud of more than $1 billion sometimes referred to as "India's Enron".
Price Waterhouse was Satyam's auditor during the period in which the fraud was perpetrated.
"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," Price Waterhouse said in a release.
"There has been no intentional wrong doing by PW firms in the unprecedented management perpetrated fraud at Satyam, nor have we seen any material evidence to the contrary," said Price Waterhouse, adding it was confident of getting a court to stay the order before it becomes effective.
SEBI also ordered Price Waterhouse, Bangalore and two of its erstwhile partners to jointly forfeit "wrongful gains" of about 131 million rupees ($2.06 million) plus interest within 45 days.
Indian IT firm Tech Mahindra, part of the Mahindra Group, bought control of Satyam in an auction in April 2010.
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 "Satyam Scam: Sebi banks Price Waterhouse firms for 2 years, here's what all happened")
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