Sebi moves Supreme Court against SAT's order in Price Waterhouse case

The Securities and Exchange Board of India (Sebi) has appealed in the Supreme Court against the Securities Appellate Tribunal (SAT) order in the Price Waterhouse (PW) case. On September 9, the tribunal had quashed the order passed by the regulator against the global audit firm for its role in the Satyam scandal. 

Many believe the SAT order has cast doubt over Sebi’s regulatory turf and whether it has the power to impose strictures against auditors, who are regulated by the ICAI.

“The SAT order raises an important jurisdictional point. At present, the National Financial Reporting Authority is not fully functional. Even assuming that it was, the jurisdictional issue will still crop up when it comes to action taken against auditors by Sebi,” Sandeep Parekh, partner at Finsec Law Advisors, had said after the SAT order.

In January 2018, Sebi had issued an order banning PW firms and two of its auditors from providing services to listed firms and market intermediaries for two years, for their involvement in the accounting scam.

Sebi has said the order against PW and its auditors was under the special powers conferred upon it to protect the interests of investors in the securities market. 

SAT held that the order passed by Sebi was “remedial” and not “punitive” and debarring an entire audit firm wasn’t justified. 

Turf War

• The SAT had quashed the order passed by the regulator against the global audit firm for its role in the Satyam scandal
• The SAT order has cast doubt over Sebi’s regulatory turf and whether it has the power to impose strictures against auditors
• Sebi had issued an order banning PW firms and two of its auditors from providing services to listed firms and market intermediaries for two years