No Relief to Price Waterhouse: SAT Quashes Appeal, Refuses to Grant Extension [Read Order]

SEBI AIFs VCFs. - Taxscan

The Securities Appellate Tribunal (SAT) recently dismissed an appeal by global audit firm Price Waterhouse against an order by the Securities and Exchange Board of India (SEBI) in the Satyam Computer Services case.

While dismissing the appeal, the SAT upheld the two-year ban on the audit firm.

In January this year, India’s market regulator, SEBI had barred Price Water houses’ networking entities from issuing audit certificates to any listed company in India for two years after a probe into a nearly decade-old accounting fraud case in a software services company that became India’s biggest corporate scandal. SEBI has also ordered the disgorgement of over Rs. 13 crores of wrongful gains from the auditing firm and it’s two erstwhile partners who worked on the IT company’s accounts.

The order, however, clarifies that this would not adversely affect the audit assignments relating to the financial year 2017-18 undertaken by the firms forming part of the PWC network.

In February, the Appellate Tribunal allowed the appellants to continue with the auditing assignments of their existing clients till 31.03.2019 or till a newly constituted Bench takes an appropriate final decision in the matter.

The appellants sought for a further extension because seven clients of the Applicants / Appellants follow calendar year as their accounting year and the remaining clients have the financial year as their account year. They contended that a few clients have already written to them seeking the update of the appeal pending before this Appellate Tribunal so that those clients could take an early decision relating to engaging their auditor for the ensuing accounting year.

The Tribunal noted that there were 29 working days during the vacation of the Supreme Court / High Court.

“This Appellate Tribunal has had no vacation at all. Even assuming that the Applicants / Appellants were really in trouble finding a convenient date not coming back to the Court was a serious misbehaviour since a date had to be given as per the decision on 06.04.2018 even to complete SAT’s own records including the cause list. In any case, no fresh ground has been brought in this Miscellaneous Application. The fact that some of the clients follow the calendar year and others the financial year and the timelines relating to appointment of auditors etc are well known to the Applicants / Appellants. It was on the same grounds that this Appellate Tribunal granted interim relief by order dated 19.01.2018 and 15.02.2018 (supra). The judgment relied upon by the Applicants / Appellants may be relevant in deciding the merit of the matter/appeals. That is all the more reason that a detailed hearing of the appeal was necessary,” the Tribunal said.

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