Auditing firm Price Waterhouse is likely to face a reprimand from the Reserve Bank of India for its alleged involvement in the accounting fiasco of Satyam Computer Services.
Source close to the development said a meeting to this effect would be held shortly. “Prima facie, we have decided to blacklist the firm and send the order to the Institute of Chartered Accountants of India (ICAI), who recommend the firms for empanelment for the audit of banks and non-banking finance companies (NBFCs)”, a source said.
However, the RBI will wait for the formal investigation report of the Securities and Exchange Board of India (Sebi) and the Registrar of Companies (RoC0, before issuing a final blacklisting order. Meanwhile, it may send a word of caution to the foreign and private sector banks who may be considering Price Waterhouse as auditor. “It is their independent decision, unlike in the case of public-sector banks. As regulator, we can warn them at best, “ the official said.
The sources further said the central bank’s work would be easier if the firm gets blacklisted globally as it managed the Satyam accounts both by the Indian method and the US GAAP method. These accounts formed the basis for pricing, listing and issuing of American depository receipts by the IT firm in the overseas markets. Thus, it amounts to duping international investors too. RBI will most likely not wait for the ICAI probe, which usually takes a long time, but will act on the Sebi and Roc reports.
If issued, this will be the second blacklisting order against the firm. The RBI is still awaiting ICAI’s investigation report on Price Waterhouse’s alleged involvement in overstating the losses of the erstwhile Global Trust Bank in 2003-04. The regulator had barred the firm from the audits of banks and NBFCs for three years following the case.
Jan 9, 2009
Business - India;Regulator may blacklist Price Waterhouse
Posted by SZri at 9:08 PM
Labels: Business Standard
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