SEBI tightens the noose on PWC
on May 10th, 2010 1 Securities and Exchange Board of India which regulates the capital market has decided to go ahead with the enforcements of proceedings against audit firm Price Waterhouse Coopers (PWC) even as the latter moved a second consent application to reach an early settlement in the investigations. The auditor is being probed for accounting fraud in the Satyam Computers’ account books. This comes after SEBI had already rejected its first consent application back in March and the the second consent application is believed to have been rejected on the same grounds as the first one.
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People who are familiar with the matter feel that SEBI’s decision to go ahead with proceedings has been influenced by the fact that settling such irregularities by consent would be setting a bad precedence for the capital market. The intent is to send out strong signals that any financial fudging will not be spared with as far as investigations are concerned. Consent applications are nothing but out-of-court settlements in the context of security laws.
Typically the terms which may be included in a consent application may range from settlement amount and disgorgement amount to voluntary ban for a couple of years. The extent of punishment depends upon the circumstance of each case. Probes are still on to unearth the extent of involvement of the two partners from PWC in the over-7000 Crore Satyam scam. One of the partners in cooling his heels in a Hyderabad prison while the other is out on bail by Supreme Court.
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