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First to initiate disciplinary action in Satyam case: ICAI

Author: IANS/Saturday, January 13, 2018/Categories: Legal

First to initiate disciplinary action in Satyam case: ICAI

New Delhi, Jan 13 - The Institute of Chartered Accountants of India (ICAI) said that it has taken action against members in the Satyam case, however, it has "no powers" to take action against CA firms.

ICAI's statement comes days after market regulator Sebi barred Price Waterhouse Network of firms from auditing listed companies for two years.

"While the ICAI may not like to specifically comment on the order passed by SEBI, we would like to add that under the present provisions of the Chartered Accountants Act 1949, there are no powers presently vested with ICAI for taking action against CA firms," ICAI said in a statement.

According to ICAI, it "was the first to be off the blocks when the Satyam matter broke out in January 2009" and had initiated disciplinary cases against six members concerned in the case.

"...Despite several legal hurdles and other impediments like the respondents were in judicial custody, ICAI had proceeded with its disciplinary process in terms of the CA Act and the rules framed there under," the statement said.

ICAI pointed out that it had awarded the maximum penalty of "removal from membership permanently and imposition of monetary penalty on members of ICAI involved in the matter".

"ICAI was the body which concluded its disciplinary enquiry at the earliest amongst domestic or international agencies or bodies within 3 years by the year 2012 and disposed off the matter by award of punishment by the year 2013...," the statement said.

"Therefore, the present punishment awarded by SEBI is only a reiteration of the verdict passed by the Disciplinary Committee of ICAI except that while the ICAI had punished the concerned members, however the SEBI has imposed this punishment on the audit firm concerned."

On late Wednesday, Sebi barred Price Waterhouse network of firms from auditing listed companies for two years. However, the order will not impact audits conducted by concerned firms for 2017-18.

On its part, Price Waterhouse Network of firms in India said: "We are disappointed with the findings of the SEBI investigations and the adjudication order. 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 and so we are confident of getting a stay."

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