PWC banned for two years, over 2,500 employees fear to lose job

The ban by Indian market regulator will come into effect two months from now.

PWC banned for two years, over 2,500 employees fear to lose job

The ban by Indian market regulator will come into effect two months from now.

13 January 2018 Saturday 16:08
PWC banned for two years, over 2,500 employees fear to lose job

By Azania Post Reporter

SECURITIES and Exchange Board has banned Price waterhouse coopers (PWC) from auditing listed companies for two years, which is one of biggest corporate scandals.

Reports say the ban by Indian market regulator will come into effect two months from now.

Price Waterhouse was auditor for Satyam computers when company owner Ramalinga Raju admitted to inflating earnings.

The firm (Price Waterhouse) which has world wide operations including Tanzania  in East African has said that it will appeal the decision in court.

It added that "there has been no intentional wrongdoing by [PwC] firms in the unprecedented management perpetrated fraud at Satyam".

In January 2009, Raju stunned the corporate world by admitting to accounting malpractices to inflate earnings and assets for years.

Price Waterhouse's Indian arm, PW Bangalore, was Satyam's auditor during this period.

The collapse of Satyam Computers in 2009 cost shareholders more than $2bn and rocked India's IT industry.

Analysts said it was the biggest fraud at a listed company in India.

The group's audit functions are under the brand Price Waterhouse in India. The broader PwC entity handles consulting, tax advisory and other businesses.

Auditing services constitute around 40% of its overall business in India.

Analysts say the Sebi order is a big setback for the firm which never quite recovered from the fallout of the case.

It could very well lead some of the firm's 70-plus listed clients, which include corporate giants like Tata Steel, to shift their business.

That would mean not only a loss of revenues but it would also impact the jobs of some 2,500 workers.

Price Waterhouse lost its leadership position in the Indian market soon after Raju's confession and it has struggled to compete with other global companies such as   that of UK-incorporated multinational professional services network,  Deloitte.

BBC

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