India’s market regulator hits PwC with 2-year auditing ban
Nearly nine years after the accounting scam at Satyam Computers, India's SEBI has banned PwC from issuing audit certificates to listed companies
The Securities and Exchange Board of India (SEBI) – regulator of the country’s capital markets – has found the international auditing firm PricewaterhouseCoopers (PwC) guilty in the Satyam case and barred it from issuing audit certificates to any listed company in the country for two years, Business Today has reported.
The Satyam scandal broke in 2009 when the founder and chairman of Satyam Computers, Ramalinga Raju, confessed to embezzlement and said the company’s accounts had been doctored. He disclosed a Rs 70 billion (about US$1.5 billion) accounting fraud.
The board also ordered PwC and two former partners who worked on Satyam’s accounts – S Gopalakrishnan and Srinivas Talluri – to repay over Rs 130 million ($2 million) of wrongful gains.
The order comes nine years after the scam was revealed and after two failed attempts by PwC to settle the case.
PwC and its former partners were also told to pay interest of 12% per year on the sum demanded from January 7, 2009 till the date of payment. They were given 45 days to make the payment.
SEBI also restrained Gopalakrishnan and Talluri from directly or indirectly issuing any certificate of audit for listed companies or compliance of obligations for listed companies and intermediaries registered with the market regulator for three years.
PwC expressed disappointment at the findings and said it was confident of getting a stay before the order takes effect.
“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. We believe that the order is also not in line with the directions of the Bombay High Court order of 2011 and so we are confident of getting a stay before this order becomes effective,” PwC said in the statement.
The order related to a fraud that took place nearly a decade ago in which it played no part and had no knowledge of, it said.