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November 23, 2009

ICAI plans fresh action against PW Delhi

The Institute of Chartered
Accountants of India (ICAI) said it will issue a fresh notice
to Price Waterhouse (PW) Delhi to involve the firm in Satyam
disciplinary proceedings after the Delhi High Court objected to the
regulator’s initial notice.

Earlier this month, the court objected to the
ICAI taking action against the Delhi firm without providing any
evidence it was linked to PW Bangalore, which was the statutory
auditor of Satyam.

Although none of the recent media reports
mentioned the exact nature of the withdrawn proceedings, the ICAI’s
disciplinary committee had initially found Price Waterhouse Kolkata
and Price Waterhouse New Delhi prima facie guilty of
professional misconduct in September.

The institute has been investigating the
accounting profession’s involvement with Satyam since an INR7
billion ($1.43 billion) fraud at the software company was revealed
in January.

The high court ruling followed a petition,
presented by PW, claiming the proceedings against its Delhi firm
were illegal as it had no connection with the Bangalore-based
firm.

A lawyer acting for PW said the six Indian
affiliates of PricewaterhouseCoopers operating in India were not
related to each other in any way.

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The court allowed the Indian regulator to
issue a new notice to the Delhi firm if it can present fresh
evidence of the firm’s involvement in the scam.

Meanwhile, Indian media reports that Price
Waterhouse is exploring an out of court settlement with the
Securities and Exchange Board of India to avoid potentially
damaging and drawn-out legal proceedings for firms implicated in
any disciplinary proceedings.

PW said the settlement avenue offered by the
regulator will help both parties arrive at mutually acceptable
terms.

“PW is aware of the impact that the fraud
perpetrated by the former chairman of Satyam has had on business
confidence in India,” PW said.

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

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