ICAI to drop case against PW-Delhi

Takes decision after Delhi High Court’s objections.

Accounting regulator ICAI today agreed to withdraw disciplinary proceedings against audit firm Price Waterhouse (PW) Delhi for its alleged involvement in the multi-crore scam in Satyam Computer Services. The Institute of Chartered Accountants of India (ICAI) decided to withdraw proceedings against PW, Delhi, after the Delhi High Court objected to the regulator’s action against the firm without giving any evidence that it was related to PW, Bangalore, the statutory auditors of Satyam.

“They are separate partnership firms with separate balance sheets. There is no inter-connection (between PW-Delhi, PW-Bangalore and PW-Kolkata) and profit and loss of one cannot be shared by others. You cannot say that the Bangalore firm which was statutory auditor of Satyam has anything to do with the Delhi firm,” said Justice Sanjiv Khanna.

The court, however, made it clear that the regulator is free to initiate fresh proceedings if it finds “prima facie evidence of misconduct” against PW-Delhi, a member of global auditing firm PriceWaterhouseCoopers.

“I am with you (ICAI) if they are wrong. But the anxiety of the court is that there must be fairness in the proceeding. If someone has done wrong, then he must be punished,” the Court told ICAI while passing the order. The role of PW auditors came to light after Satyam founder B Ramalinga Raju admitted to the nearly Rs 8,000-crore fraud in the IT firm in January this year.

Advocate Amit Sibal, appearing for PW-Delhi, submitted ICAI’s action was illegal, as PW-Bangalore had audited Satyam accounts. “We have nothing to do with the Bangalore firm which had audited Satyam accounts," Sibal said.