In a major setback to Sebi (Securities and Exchange Board of India), SAT on Monday overturned the markets regulator’s order banning PriceWaterhouse Coopers from auditing any listed company for two years for its role in the Rs. 7,800-crore Satyam scam. However, Securities Appellate Tribunal or SAT partly allowed disgorgement of the Rs. 13 crore fee from the auditor. The scam saw the company Ramalinga Raju-promoted company going belly up in January 2009.
Setting aside the ban on PwC, which is one of the Big Four global accounting firms, SAT said, only the national auditors watchdog ICAI (Institute of Chartered Accountants of India) can take any action against its members and fraud cannot be proved on the basis of negligence in auditing.
“Sebi has no authority to look into the quality of audit and auditing services. Sebi can only take remedial and preventative action. The direction issued is neither remedial nor preventive. But punitive,” SAT said.