Satyam case: PW opts for consent proceedings

Suggests settlement initiated by Sebi.

Audit company Price Waterhouse (PW) has decided to pursue consent proceedings with the Securities and Exchange Board of India (Sebi) to settle the Satyam audit case under the Fraudulent and Unfair Trade Practices (FUTP) norms.

Sebi had served a show-cause notice to PW in February.

In a statement issued in the evening, PW confirmed that it had decided to pursue consent proceedings. Rather than engage in potentially long-drawn-out legal proceedings with Sebi, the audit company said it would be better for all parties to explore, without prejudice, the settlement of proceedings initiated by the market regulator.

Consent proceedings typically last two to three months.

The avenue to settle proceedings, offered as part of the normal Sebi procedures, is designed to arrive at mutually acceptable terms. PW said it was aware of the impact that the fraud perpetrated by the former chairman of Satyam has had on the business confidence in India.

However, it said the pursuit of a potential settlement is not in any way an acknowledgment by it that there was any wrongdoing in relation to the audit of Satyam.

On January 7, Satyam founder R Ramalinga Raju admitted to inflating the company’s balance sheet by Rs 7,700 crore.

Consequently, R Ramalinga Raju, his brother Rama Raju and chief financial officer Srinivas Vadlamani were arrested. Two PW auditors, S Gopalakrishnan and Srinivas Talluri, were also arrested.