PwC firm banned in India for two years following $1bn Satyam fraud

 
Oliver Gill
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Price Waterhouse insisted "no intentional wrongdoing" had been done on its part (Source: Getty)

One of accountancy giant PwC's member firms has been banned from auditing in India for two years.

Price Waterhouse was last night barred by the Securities and Exchange Board of India (SEBI) following a long-running investigation into one of India's biggest accounting scandals.

Ramalinga Rajuthe, the founder of software services exporter Satyam Computer Services, sometimes referred to as "India's Enron", admitted in 2009 that the firm had overstated earnings and assets amounting to around $1bn (£750m) for several years.

Satyam was audited by Price Waterhouse during the period of the overstatement.

The SEBI order banned companies practising as chartered accountants in India under the banner of Price Waterhouse from issuing an audit certificate to listed companies for the next two years.

Read more: Satyam and PwC settle US fraud case

Fine

Indian authorities also slapped Price Waterhouse with a fine of 131m rupees (£1.5m) plus interest.

Similar to most big accountancy firms, PwC operates as an international network of member firms. While the firms are distinct legal entities, they operate under a global umbrella.

Alert to this, the SEBI order prevented any other PwC firm from taking over from Price Waterhouse.

"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 order read.

Price Waterhouse insisted "no intentional wrongdoing" had been done on its part. It said it was confident courts would stay the order before it comes into effect.

“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,” Price Waterhouse said in a statement, according to Reuters.

Read more: PwC partner pay falls as Deloitte gains ground

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