English हिन्दी
Connect with us

Latest business news

Satyam Scam: Sebi bans Price Waterhouse from auditing Indian firms for two years



[vc_row][vc_column][vc_column_text]Securities and Exchange Board of India found Pricewaterhouse Coopers guilty of complicity in the fraud that led to the decline of Ramalinga Raju’s Satyam Computers

Over nine years after the Rs 7136 crore Satyam Scam rocked India, Securities and Exchange Board of India (Sebi), late on Wednesday night (January 10) banned international auditing giant Pricewaterhouse Coopers (PwC) and its network entities from issuing audit certificates to any listed company in India for a period of two years.

The stock market regulator has also ordered disgorgement of over Rs 13 crore wrongful gains – along with interest calculated at 12 per cent per annum for the past nine years – from PwC and its two erstwhile partners who worked on the books of accounts of the B Ramalinga Raju-owned Satyam Computers at the time when the fraud was reported.

The decision of Sebi comes after two efforts by PwC to settle the case through consent mechanism and arbitration failed to yield any positive result.

“We are disappointed with the findings of the Sebi investigations and the adjudication order… we are confident of getting a stay before this order becomes effective,” Price Waterhouse said in a statement.

In its 108-page order – seen as the most strident ruling by the market regulator against any auditing company so far – Sebi said the company’s entities/ firms practicing as chartered accountants in India under the brand and banner of Price Waterhouse are banned from directly or indirectly issuing any certificate of audit of listed companies, compliance of obligations of listed companies and intermediaries registered with the regulator.

However, Sebi noted that the order would not impact audit assignments relating to the financial year 2017-18 undertaken by the firms forming part of the PW network.

The auditor’s Bengaluru firm and two erstwhile partners — S Gopalakrishnan and Srinivas Talluri — have been directed to disgorge the wrongful gains of “Rs 13,09,01,664 with interest calculated at the rate of 12 per cent per annum from January 7, 2009 till the date of payment”. This amount has to be paid within a period of 45 days.

Gopalakrishnan and Talluri have also been restrained from directly or indirectly issuing any certificate of audit of listed companies, compliance of obligations of listed companies and intermediaries registered with Sebi for three years.

Price Waterhouse had earlier approached the Supreme Court challenging Sebi’s jurisdiction over auditors. However, the apex court had asked the regulator to expeditiously pass the order in the matter after giving due opportunity, including access to documents, to the parties concerned.

Matters related to Satyam were also looked into by US regulators as PwC is also a listed company in the American market. However, the American authorities had agreed to settle case.

Sebi said the objective of insulating the securities market from such fraudulent accounting practices perpetrated by an international firm of repute will be ineffective if the directions do not bring within its sweep, the brand name PW.

The network structure of operations adopted by the international accounting firm should not be used as a shield to avoid legal implications arising out of the certifications issued under the brand name of the network, the Sebi order said.

Price Waterhouse has, expectedly, rejected the charges brought out against it by Sebi while expressing its disappointment on the ban. “The Sebi order relates to a fraud that took place nearly a decade ago in which we played no part and had no knowledge of. As we have said since 2009, there has been no intentional wrong doing by PW firms in the unprecedented management perpetrated fraud at Satyam, nor have we seen any material evidence to the contrary. We believe that the order is also not in line with the directions of the Hon’ble Bombay High Court order of 2010,” the accounting firm said in a statement issued as a response to the Sebi order.

In August 2010, the Bombay High Court had ruled that no directions can be issued against PwC if there is only some omission without proof of connivance and intent to fraud.

During the course of quasi-judicial proceedings, the auditing major had argued that ‘an auditor is not required to be a detective in the process of audit and it is sufficient to show that reasonable care and due diligence was administered by the auditor’.

With the Sebi order now jeopardising its operations in India, the international auditing giant claimed that Price Waterhouse Network firms in the country had learnt the lessons of Satyam and invested heavily over the last nine years in building a robust and high quality audit practice.[/vc_column_text][vc_column_text css=”.vc_custom_1515660175789{padding-top: 10px !important;padding-right: 10px !important;padding-bottom: 10px !important;padding-left: 10px !important;background-color: #d6d6d6 !important;border-radius: 10px !important;}”]The Satyam Scam  

The scam – estimated at a staggering Rs 7136 crore – had come to light in January 2009 after Satyam Computer’s then chairman B Ramalinga Raju admitted in a letter to the company’s board and stock exchanges to have inflated revenue and profit over several years through an accounting fraud. The swindle was projected as India’s biggest accounting scam. The promoters – Ramalinga Raju and his kin – allegedly inflated revenue, fabricated invoices, falsified accounts and income tax returns, and forged fixed deposit receipts to paint a robust picture of the company’s financial strength.

PwC was the auditor of the company between 2000 and 2008; the period when these manipulations seemed to have taken place. According to Sebi, it needs to be borne in mind that PW firms have benefited from the relationship with Satyam Computer Services by having collectively received a fee of over Rs 23 crore during these years.

Out of this amount, over Rs 13 crore was ostensibly paid towards PW Bangalore for the audit of Satyam Computer Services as submitted by it. “Given that this remuneration was the identifiable monetary gain made by PW in its association with the audit of SCSL, it is clear that this wrongful gain is liable to be disgorged… the entire gain made from PW’s relationship with SCSL shall be treated as wrongful gain liable to be disgorged,” the Sebi has now concluded.[/vc_column_text][vc_column_text]Further explaining why it was taking the strong action against PwC, Sebi said: “The acts of the auditor induced the public to trade consistently in the shares of the company.”

During its investigations against Price Waterhouse, Sebi found that the company relied on the documents, such as bank account statements fixed deposit statement, that originated or had been sourced from the company itself.  “Bank statements should have been directly verified with the banks… By relying on the bank statements obtained from the auditee company merely on the ground that the statements looked genuine and did not arouse suspicion, PW clearly defied the auditing standards and principles,” Sebi said.[/vc_column_text][/vc_column][/vc_row]

Latest business news

Rapido to introduce cab services soon

The company intends to introduce Rapido taxis in Delhi-NCR as early as next week, according to sources.




Rapido, the two- and three-wheeler ride-hailing platform with the quickest growth, is getting ready to introduce the taxi service on a wide network shortly. According to reports, Rapido’s planned facility will offer a service comparable to that of Ola and Uber.

According to the report, a daily choice would be made to provide passengers with a flawless travel experience. The brand hasn’t yet disclosed the precise launch information, though.

The company is currently testing out a taxi service in Hyderabad and is receiving positive feedback from users. According to reports, the company is testing the service at an advanced stage and may expand the network to further locations once it receives more positive feedback.

The company intends to introduce Rapido taxis in Delhi-NCR as early as next week, according to sources.

A statement from Rapido that read, the company is thrilled to share that our test run for Rapido Cabs in Hyderabad is off to a fantastic start. The dynamic market of the city has welcomed us with open arms, and the encouraging feedback is quite encouraging. We sincerely hope to expand our cutting-edge services to further cities and are dedicated to keeping you fully updated on our progress as we forge ahead.

Additionally, the article mentioned that Rapido wants to work with Zingbus, a company based in Gurugram, to integrate intercity bus ticketing into its app.

Meanwhile, for the previous eight years, Rapido has been providing bike taxi services. Since its founding in 2015, the organisation has expanded its network to encompass over 100 communities across the country, and it has received overwhelmingly positive feedback. Following its popularity, the brand expanded to include the 3-wheeler category with the same service.

Based on information found on Tracxn, Rapido has raised $324 million in total. Swiggy, an online meal delivery business, spearheaded the company’s $180 million fundraising effort in April of last year.

Continue Reading

India News

BSE Sensex, Nifty fall due to tension in Middle East

The 30 share Bombay Stock exchange fell 407.19 points in the early trade. The Nifty fell 142.7 points. Asian Paints, IndusInd Bank, Titan, Tata steel and State Bank of India were the major stock which lagged behind.



BSE Sensex, Nifty falls due to tension in Middle East

The BSE Sensex, Nifty fell on early trade on Monday as rising tensions in the middle east has set off a risk off in the market. According to market analysts investors preferred to remain on the sidelines and did not take any big risks as Hamas-Israel conflict has caused huge uncertainity for the markets.

The 30 share Bombay Stock exchange fell 407.19 points in the early trade. The Nifty fell 142.7 points. Asian Paints, IndusInd Bank, Titan, Tata steel and State Bank of India were the major stock which lagged behind. But Sun Pharna, Hindustan Unilever, Infosys, Wipro, TCS, Tech Mahindra and HCL technologies did not go according to the market trend and traded in the positive territory.

The BSE had gone up 364.06 points or 0.55 percent to settle at 65,995.63 points on Friday. The Nifty had gone up 107.75 points to settle at 19,653.50. The Hamas-Israel conflict has caused a huge uncertainity in the market. VK VijayaKumar, chief investment strategist at Geojit Financial services said No one knows how this war is going to evolve.

He said the war is not going to cause disruption to the oil supplies, the situation will change if Iran is drawn to the war. As Iran is a major Hamas supporter. Vijayakumar said this can cause disruption in oil supplies which will further lead to increase in crude oil prices. He said it is a time to remain cautious in the market.

The manufacturing data and industrial production for the month of August are going to be announced on October 12. Inflation rate for September will be announced after the Wholesale price index (WPI) data on October 13.The Reserve Bank of India had left its key interest rate unchanged. RBI signaled to keep liquidity tight by using bond sales to bring prices closer to market.

Continue Reading

Latest business news

First look of Air India’s aircraft following changes to the logo and design revealed | See here

Air India uploaded images of its A350 aircraft parked in a paint shop in Toulouse, France, on X, formerly known as Twitter. This winter, the jet will touch down in India.



Air India

Prominent airline Air India posted the first image of its aircraft on Saturday after changing its name, logo, and livery after being acquired by the Tata Group.

Air India uploaded images of its A350 aircraft parked in a paint shop in Toulouse, France, on X, formerly known as Twitter. This winter, the jet will touch down in India.

Here is the majestic A350 in our new livery for the first time, as seen in Toulouse’s paint shop. This winter, our A350s start returning home… @Airbus, tweeted Air India.

As part of its rebranding effort, Air India earlier in August announced its new logo and colour palette.

The new logo, which features a more stylized style and a new colour scheme of red, white, and purple, is a contemporary interpretation of the airline’s well-known Maharaja mascot.

The strong red lettering of Air India is still present in the new colour scheme but is in a different font. Air India is written in white in a red area on the underside of the aircraft as part of the colour scheme.

According to the airline, the new livery and design of the aircraft incorporates a pattern that is inspired by the chakras and a colour scheme of deep red, aubergine, and gold highlights.

The airline’s previous logo, which depicted a red swan embellished with the recognisable orange Konark Chakra, has been replaced.

Tata Sons Chairman N Chandrasekaran stated the new logo signifies limitless possibilities at the time of unveiling it.

In January 2022, Tata Sons bought Air India through Talace Private Limited, an entirely owned subsidiary. Later, it was revealed that Air India and Vistara, a different Tata Sons division, will be combined to form a more cohesive organisation. By March 2024, this merger is expected to be finished.

Continue Reading



© Copyright 2022 APNLIVE.com