SAT extends relief to Price Waterhouse

The Securities and Appellate Tribunal (SAT) on Thursday extended the relaxation provided to Price Waterhouse (PW) to service existing clients until March 2019. On January 19, the tribunal had allowed PW to continue providing services to existing clients until December 2018.

However, the new Bench of the SAT could relook at this relaxation. The tribunal’s Bench is set to be reconstituted after one of its members retires this month. PW’s matter will further be heard by the new Bench. The SAT said that PW had the liberty to complete any work of certification other than audit.

PW has moved the SAT against the Securities and Exchange Board of India’s (Sebi’s) January 10 order, banning audit firms under 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 were banned for three years. The company is seeking a blanket stay on the order.

During the argument, PW counsel and former attorney-general Mukul Rohatgi said the company had lost a big client due to the uncertainty caused by the order. He added that the audit committees of all its clients were contemplating switching to a different audit firm.

Rohatgi argued that PW Bengaluru was the only entity that was awarded the Satyam audit contract. He said the stand of that branch could not be identical to the remaining subsidiaries banned by Sebi and added that the regulator would have to prove that all of them conspired and abetted the said fraud. The SAT questioned whether PW Bengaluru was a separate entity. Rohatgi replied that the Institute of Chartered Accountants of India recognised all these as separate entities. He said all entities had separate chartered accountant and registration numbers. However, being the same network entity, PW had common partners and shared manpower. He said that the same network could not make the entire firm liable for one fraud. Rohatgi alleged that the two CAs, S Gopalakrishnan and Srinivas Talluri, should be held responsible instead of the entire audit firm.