New Delhi: India’s top accounting body, the Institute of Chartered Accountants of India (Icai), has agreed to withdraw a show-cause notice issued to auditing firm Price Waterhouse New Delhi in the aftermath of the scam at Satyam Computer Services Ltd.
The move followed a hearing in the Delhi high court on Wednesday, Price Waterhouse New Delhi said in a statement.
Being probed: Former Satyam head B. Ramalinga Raju coming out after attending a hearing at Nampally criminal court in Hyderabad. Bharath Sai / Mint
Advocate C.S. Vaidyanathan, appearing for Icai, agreed to withdraw proceedings after the court objected to the accounting body taking action against the Delhi unit of the firm without giving any evidence that it was related to Price Waterhouse Bangalore, the statutory auditor of Satyam.
Satyam founder chairman B. Ramalinga Raju confessed in January to having doctored the firm’s accounts for several years to the tune of Rs7,136 crore, triggering India’s biggest corporate governance scandal and casting a cloud over auditing standards in India.
Satyam has since been sold to Tech Mahindra Ltd.
International auditors have member firms in various Indian cities because local rules restrict their practice to 20 partners. They are also not allowed to audit companies in India under their international brand names.
PricewaterhouseCoopers’ audit practice in India is run as Price Waterhouse followed by the name of the city. It also has other member firms such as Lovelock and Lewis.
The show-cause notice was issued to Price Waterhouse New Delhi on 8 October.
Judge Sanjiv Khanna accepted Icai’s plea to withdraw the notice.
The accounting body will be allowed to issue a fresh notice to the Delhi unit in case it found any evidence of the firm’s involvement in the Satyam scam.
The high court acted on a petition filed by Price Waterhouse Delhi that said proceedings initiated against it in the aftermath of Satyam scam were illegal.
“We have nothing to do with the Bangalore firm which had audited Satyam accounts. So there doesn’t arise any cause for action against us in the aftermath of the Satyam scam,” senior advocate Mukul Rohatgi, appearing for the Delhi firm, said.
“Price Waterhouse is pleased with the decision of the Delhi High Court allowing ICAI to withdraw its show cause notice,” the Price Waterhouse Delhi statement said.