Accountancy firm Price Waterhouse banned from India
PwC’s Indian unit has been banned from auditing listed companies for two years, over one of the country’s biggest corporate scandals.
Price Waterhouse was auditor for Satyam computers when company owner Ramalinga Raju admitted to inflating earnings.
The ban by Indian market regulator the Securities and Exchange Board (Sebi) will come into effect on 31 March.
Price Waterhouse has said that it will appeal the decision in court.
It added that “there has been no intentional wrongdoing by [PwC] firms in the unprecedented management perpetrated fraud at Satyam”.
In January 2009, Raju stunned the corporate world by admitting to accounting malpractices to inflate earnings and assets for years.
Price Waterhouse’s Indian arm, PW Bangalore, was Satyam’s auditor during this period.
The collapse of Satyam Computers in 2009 cost shareholders more than $2bn and rocked India’s IT industry.
Analysts said it was the biggest fraud at a listed company in India.
The group’s audit functions are under the brand Price Waterhouse in India. The broader PwC entity handles consulting, tax advisory and other businesses.
Auditing services constitute around 40% of its overall business in India.
Analysts say the Sebi order is a big setback for the firm which never quite recovered from the fallout of the case.
It could very well lead some of the firm’s 70-plus listed clients, which include corporate giants like Tata Steel, to shift their business.
That would mean not only a loss of revenues but it would also impact the jobs of some 2,500 workers.
Price Waterhouse lost its leadership position in the Indian market soon after Raju’s confession and it has struggled to compete with other global companies like Deloitte.
Coca-Cola pledges to recycle all packaging by 2030
Image copyright AFP/Getty Images Coca-Cola has announced a pledge to recycle a used bottle orRead More
Dignity cuts funeral prices amid growing competition
Image copyright Getty Images Dignity, the UK’s only publicly-owned funeral business, is cutting the priceRead More