Sebi spikes Satyam auditors' plea

Market regulator Securities and Exchange Board of India (Sebi) today refused to stay the proceedings against Price Waterhouse (PW) partners S Gopalakrishan and Srinivas Talluri for their alleged involvement in the Satyam fraud case and asked them to appear before it on February 5.

Sebi had issued a showcause notice to the partners of PW in the Satyam case in February 2009 but could not proceed with the case.

Rejecting the contention of the two chartered accountants that similar proceedings by Sebi and the Central Bureau of Investigation could not go together, the market regulator said in its order, “The hearing of the showcause notices shall proceed on merits.”

“The next hearing of the matter is scheduled on February 5, 2011. The hearing has been fixed on Saturday as the noticees have pointed out the hearing of the criminal trial is proceeding on day-to-day basis and they are required to remain present at the trial each day,” it said.

Sebi had issued a notice to PW, the Indian arm of international audit company, asking them to explain its role in the Satyam scam as it was associated with the company for several years.

The order further said, two years have passed since the showcause notice was issued and “we have not moved an inch.” If the submission of the noticees are accepted, it would have the effect of unduly delaying, and, therefore, frustrating the present proceedings.

The Satyam case, it said, “involves an unprecedented fraud which had a devastating impact on the securities market and caused enormous loss to many investors. It is necessary that such cases be decided as expeditiously as possible and not delayed unduly. It would cause severe prejudice to the interests of investors, if the present proceedings are delayed any further.”

Satyam case pertains to fudging of accounts to the tune of Rs 10,000 crore by its founder Chairman B Ramalinga Raju. It came to light after Raju confessed window dressing of balance sheet in January 2009.

The company was later taken over by Tech Mahindra and has been renamed as Mahindra Satyam.