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SAT allows Price Waterhouse to service clients till March 2019

Shrimi Choudhary/Mumbai 15 Feb 18 | 09:52 PM

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he Securities and Appellate Tribunal (SAT) on Thursday extended relaxation provided to Price Waterhouse (PW) to allow it to service existing clients whose financial year ends in March 2019.

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On January 19, the tribunal had allowed PW to continue servicing existing clients until December 2018.

SAT, however, its new bench could relook at this relaxation. The tribunal's bench is set to be reconstituted as one its member is retiring this month. The matter will be further heard by the new bench.

PW has the liberty to complete any work of certification other than just audit, SAT said on Thursday.

PW has moved SAT against Sebi's January 10 order banning audit firms under the brand PW from providing audit services to listed companies and market intermediaries for two years for its alleged involvement in the Satyam fraud case. Two PW partners have also been banned for three years. PW is seeking a blanket stay on the Sebi's order.

During the argument, PW counsel and former attorney general Mukul Rohatgi said that PW had lost one big client due to uncertainty caused by the Sebi order.

He further said that the audit committees of all its big clients are contemplating replacement of audit firm. PW submitted the affidavit comprising of client emails and queries to the tribunal.

Rohtagi argued that PW Bengaluru was the only entity which was awarded audit contract of Satyam. He said that stand of Bangalore cannot be identical with remaining firms which was banned by Sebi. The regulator has to prove that all of them conspired and abetted for the said fraud.

On this, SAT questioned whether the PW Bengaluru is a separate entity. PW counsel replied that Institute of Chartered Accountant (ICAI) recognizes all these firms separately.

They have separate chartered accountant and registration number. However, being the same network entity, PW have common partners and they do share manpower. He further said that same network, however, cannot make the entire firm liable for one fraud.

Rohtagi went on to say that the two CAs- S Gopalakrishnan and Srinivas Talluri - should be held responsible for it rather than entire audit firm.

Sebi has imposed a disgorgement of Rs 130.9 million on three entities also have to pay 12 per cent interest on the disgorgement amount starting January 7, 2009, within 45 days from the date of the order.

The case dates back to 2009, when the then chairman of Satyam Computer Services (Satyam) B Ramalinga Raju admitted and confessed to large scale financial manipulations in the company's book of accounts to the tune of Rs 50.4 billion. Soon after this, Sebi initiated investigations and later on issued showcause notices to PW and its associates in February 2009. Further notices were issued to PW in 2012 under FUTP (Fraudulent and Unfair Trade Practices) regulations.

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