Satyam scam: SC turns down PW auditors’ plea against Sebi action

The Supreme Court on Tuesday rejected pleas of Price Waterhouse auditors Srinivas Talluri and Subramani Gopalakrishnan,accused in the Rs 14,000-crore Satyam scam,to defer inquiry proceedings initiated by Sebi against them.

Written by Indu Bhan | New Delhi | Published:July 3, 2013 3:55 am

The Supreme Court on Tuesday rejected pleas of Price Waterhouse auditors Srinivas Talluri and Subramani Gopalakrishnan,accused in the Rs 14,000-crore Satyam scam,to defer inquiry proceedings initiated by Sebi against them.

The auditors had approached the apex court seeking deferment of the Sebi proceedings against them pending the criminal trial going on in a Hyderabad court and disciplinary proceedings before the Institute of Chartered Accountants of India (ICAI).

A bench headed by HL Gokhale,while disposing of the two petitions,asked the auditors to file reply to the Sebi’s showcause notices of 2009 and 2010 at the earliest.

It further said the Bombay High Court’s order,which had passed some adverse directions against the auditors,would continue for three months after the final reply is received by Sebi,which is supposed to follow ‘proper procedures’ while deciding on the showcause notices.

Gopalakrishnan and Talluri had challenged the Bombay High Court’s order that allowed Sebi to commence its inquiry against them.

The HC,in its February 2012 judgment,had restrained the auditors from issuing any certificate with respect to compliance of obligations of listed companies and intermediaries registered with Sebi. Besides,it had barred them from trading in the securities of Satyam and its associate listed companies.

The HC had also given liberty to the market regulator to issue appropriate directions to listed companies not to engage services of the auditors for issuing any certificate with respect to compliance of statutory obligations which Sebi is competent to administer till the disposal of proceeding before it (regulator). The HC had also upheld Sebi’s powers to issue showcause notices to auditors in the pursuit of remedial or preventive measures to protect the interests of investors and the securities market.

After preliminary investigations,Sebi had found evidence against Gopalakrishnan and Talluri.

Following this,it asked Price Waterhouse and 20 of its partners to showcause why they should not be prohibited from auditing listed firms for their alleged role in concealing the Satyam scam. Gopalakrishnan and Talluri,who were arrested,are currently out on bail.

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