Price Waterhouse, the Indian affiliate of global accounting
firm PricewaterhouseCoopers, has filed a consent application with capital
market regulator SEBI as part of an effort to reach an early settlement to the
ongoing investigation into the accounting fraud at Satyam Computers, renamed
as Mahindra Satyam, after the Mahindra group acquired the troubled company
earlier this year.
Price Waterhouse was the statutory auditor for Satyam
Computer, whose founder Ramalinga Raju confessed in January this year to
having fudged accounts to perpetrate a Rs.7,000-crore financial fraud. A probe
into the scam revealed that documents were forged to back fake bank deposits.
Price Waterhouse filed an application late last week in response to the show
cause notice that SEBI had issued in February 2009. This consent application
is in line with SEBI’s regulations and does not acknowledge Price Waterhouse’s
alleged wrongdoing in the Satyam fraud.
A Price Waterhouse spokesperson confirmed that the firm has
decided to pursue consent proceedings in relation to SEBI proceedings on the
audit of Satyam Computer Services rather than engage in a potentially long
drawn out legal proceedings with the regulator.
Under SEBI rules, after a consent application is filed,
representatives of SEBI meet up with the company to arrive at some sort of a
settlement, which could also include payment of a fine. After both parties
agree to a settlement, a high powered committee of SEBI passes a consent
order.
(Source : The Economic Times, 24-10-2009)
