Mumbai: Price Waterhouse (PW) on Wednesday moved the Securities Appellate Tribunal (SAT) against the Securities and Exchange Board of India (Sebi) order barring firms in its network from auditing listed entities for two years, said three people aware of the matter, including a PW spokesperson.
“We have moved SAT against the Sebi order,” the spokesperson confirmed, without going into details. The petition asked for setting aside Sebi directions and staying the ban in the interim, said the first of the three people cited earlier. The interim plea will be heard on Friday. PW is being represented by Zerick Dastur Advocates & Solicitors.
Sebi on 10 January had banned all firms in the PW network from auditing listed companies for two years. Sebi found the audit firm guilty in the nine-year-old Rs7,136 crore Satyam Computer Services Ltd scam. In its 108-page order, the market regulator said the firm was complicit with the main perpetrators of the accounting fraud and did not comply with auditing standards.
The petition is on the grounds that the Sebi order is not in line with the directions of the Bombay high court order of 2010 and that the remedial measures cannot take the form of a ban, said the second of the two people cited earlier. “The Sebi ban is on the entire network. The plea is also contesting the strictures on the entire firm,” this person added.
In August 2010, the high court had ruled that no direction can be issued against PW if there is only some omission without proof of connivance and intent to fraud.
“We can argue that Sebi’s action could have been punitive in terms of a penalty rather than a ban. But PW’s action do not win them any sympathies with the investors as they should have accepted responsibility instead of such challenges,” said Amit Tandon, chief executive of Institutional Investor Advisory Services Ltd, a proxy advisory firm.livemint