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On September 9, the Securities Appellate Tribunal (SAT), Mumbai, overturned SEBI's order barring Price Waterhouse from auditing listed firms for a period of two years due to its role in the Satyam Computer Services' fraud case.SEBI in his plea said: "SAT has grossly erred in law by failing to appreciate that, on conclusion of inquiry, after a detailed consideration of the evidence adduced and materials on record, Whole Time Member (WTM), SEBI had found that there has been a total abdication by the respondent (Price Waterhouse) of their duty to follow the Accounting Standards prescribed by the ICAI and minimum standards of diligence and care expected from a statutory auditor, compelling the WTM to draw an inference of malafide and involvement of Respondents in the large scale financial manipulations of Satyam Computer Services Limited ('SCSL', 'the Company') that had come to light with the e-mail dated January 7 forwarded by B. Ramalinga Raju, the then Chairman of the said company."Challenging the tribunal's order, SEBI told the apex court that these auditors had ignored vital materials like the internal audit report which flagged material discrepancies in reconciliation of the invoices.According to the petition, SEBI found that the auditors had failed to get independent verification of the cash and bank balances done from banks for a period of eight years and had instead relied on purported one-line confirmation given by Satyam itself.Thus, "the current account balance of Rs 1,731.88 crore and the FD balance of Rs 3,318.37 crore projected in the accounts of Satyam as on September 30, 2008, and as audited by PW throughout the previous 8 years and wrongly published to the world at large was without following the procedures mandated under prescribed accounting standards," the plea said.The petitioner also said that SAT has grossly erred in holding that SEBI, as a Regulator, has no authority under the SEBI Act and the rules and regulations framed thereunder, to look into the quality of audit service performed by auditors.In its order, SAT has said that SEBI as a regulator has no "authority under SEBI laws and regulations" to look into the quality of audit services performed by the auditors.Consequently, the SEBI order debarring PW firms as well as the two auditors from auditing listed companies was found unsustainable and was quashed.Earlier, SEBI investigations had found that certain directors and employees of Satyam Computers (SCSL) had connived and collaborated in the overstatement, fabrication, falsification and misrepresentation in the books of account and financial statements of SCSL."The published books of accounts of SCSL contained false and inflated current account bank balances, fixed deposit balances, fictitious interest income revenue from sales and debtors' figures. The investigation also noted that the statutory auditors of SCSL had connived with the directors and employees of SCSL in falsifying the financial statements of SCSL," SEBI said.SEBI had said that "firms practising as Chartered Accountant (CA) in India under the brand and banner of Price Waterhouse (PW) shall not directly or indirectly issue any certificate of audit of listed companies, compliance of obligations of listed companies and intermediaries registered with SEBI under the applicable laws for a period of two years".Individual auditors, the regulator added "namely, S. Gopalakrishanan and Srinivas Talluri, shall not issue an audit certificate or any certificate of compliance with respect to a listed company for a period of three years"."Gopalakrishanan, Talluri and M/s. Price Waterhouse Bangalore shall jointly and severally disgorge the wrongful gains of Rs 13,09,01,664/- alongwith interest @ 12% p.a. from January 7, 2009 till the date of payment".SEBI said that the facts leading to the filing of the aforesaid appeals are that PW Bangalore was given the audit for auditing the books of accounts of Satyam Computers Services Limited.( With inputs from IANS )

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