SC stays SAT’s order holding that SEBI lacks power to bar auditors

SEBI challenged SAT’s ruling quashing ban on PwC in Satyam The Supreme Court on Monday stayed an order of the Securities Appellate Tribunal (SAT) which had held that markets’ watchdog Securities and Exchange Board of India (SEBI) does not have the power to bar auditors. A Bench comprising Justices Arun Mishra and Indira Banerjee also issued notice on the appeal filed by the SEBI against the SAT’s September 9 order. The SAT, in its order, which set aside the ban on audit firm Price Waterhouse (PwC), had noted that the SEBI does not have the power to bar auditors. Earlier, the SEBI had challenged SAT’s decision to quash a two-year ban that was imposed on PwC in connection with the ₹7,8000000000 Satyam fraud. On January 10, 2018, the watchdog slapped a two-year ban on Price Waterhouse (PwC), an arm of PricewaterhouseCoopers India, from auditing any listed company in connection with the PwC’s role in the scam. The tribunal had quashed the order but partly allowed disgorgement of the ₹130000000 fee from the auditors concerned. Satyam case The fraud at erstwhile Satyam Computer Services came to light on January 8, 2009 wherein the company’s founder Ramalinga Raju publicly admitted to cooking the books to the tune of ₹5,0040000000 over a period of time. A SEBI probe had found that the scam was much larger at ₹7,8000000000. Setting aside the ban, the tribunal had said that only the Institute of Chartered Accountants of India (ICAI) could take any action against auditors and that frauds cannot be proved on the basis of negligence in auditing.