SAT quashes SEBI ban on PWC of 2 years : Judgement

BEFORE THE SECURITIES APPELLATE TRIBUNAL
MUMBAI
Order Reserved on: 04.04.2019
Date of Decision: 09.09.2019
Appeal No. 6 of 2018
 

1. Price Waterhouse & Co. now known as
Price Waterhouse & Co. Bangalore LLP,
a partnership firm registered with the Institute
of Chartered Accountants of India bearing
Registration No. 007567S/S200012
5th Floor, Tower D, The Millennia,
#1 & 2 Murphy Road, Ulsoor,
Bangalore - 560008.
 

2. Price Waterhouse & Co. now known as
Price Waterhouse & Co. Chartered
Accountants LLP, a partnership firm
registered with the Institute of Chartered
Accountants of India bearing Registration No.
304026E/E300009.
Plot No. Y-14, Block EP, Sector V, Salt
Lake, Electronics Complex, Bidhan Nagar,
Kolkata - 700091.
 

3. M/s. Lovelock & Lewes, a partnership firm
registered with the Institute of Chartered
Accountants of India bearing Registration No.
301056E
Plot No. Y-14, Block EP, Sector V, Salt
Lake, Electronics Complex, Bidhan Nagar,
Kolkata - 700091.
 

4. M/s. Lovelock & Lewes now known as
Lovelock & Lewes LLP, a partnership firm
registered with the Institute of Chartered
Accountants of India bearing Registration No.
116150W/W100032.
252, Veer Savarkar Marg, Shivaji Park,
Dadar (West), Mumbai - 400 028.
 

5. Price Waterhouse, a partnership firm
registered with the Institute of Chartered
Accountants of India bearing Registration No.301112E.
Plot No. Y-14, Block EP, Sector V, Salt
Lake, Electronics Complex, Bidhan Nagar,
Kolkata - 700091.
 

6. Price Waterhouse now known as Price
Waterhouse Chartered Accountants LLP, a
partnership firm registered with the Institute
of Chartered Accountants of India bearing
Registration No. 12754N/N500016.
Sucheta Bhawan, 11A Vishnu Digambar
Marg, New Delhi - 110002.
 

7. Price Waterhouse & Co., a partnership firm
registered with the Institute of Chartered
Accountants of India bearing Registration No.50032S.
8th Floor, Prestige Palladium Bayan,
129-140, Greams Road, Chennai,
Tamil Nadu 600006.
 

8. Price Waterhouse & Co. now known as Price
Waterhouse & Co. LLP, a partnership firm
registered with the Institute of Chartered
Accountants of India bearing Registration No.016844N/N500015.
Sucheta Bhavan, 1st Floor, 11-A, Vishnu
Digambar Marg, New Delhi - 110002.
 

9. M/s. Dalal & Shah now known as Dalal &
Shah LLP, a partnership firm registered with
the Institute of Chartered Accountants of
India bearing Registration No. 102020W/W100040.
1701, 17th Floor, Shapath V, Opp. Karnavati
Club, S. G. Highway, Ahmedabad 380051, Gujarat.

10. M/s. Dalal & Shah now known as Dalal &
Shah Chartered Accountants LLP, a
partnership firm registered with the Institute
of Chartered Accountants of India bearing
Registration No. 102021W/W100110.
252, Veer Savarkar Marg, Shivaji Park,
Dadar (West), Mumbai - 400028. …Appellants

Versus

Securities and Exchange Board of India
SEBI Bhavan, Plot No. C-4A, G Block,
Bandra Kurla Complex, Bandra (East),
Mumbai - 400 051. …Respondent

Mr. Mukul Rohatgi, Senior Advocate with Mr. Janak Dwarkadas,
Senior Advocate, Mr. Somasekhar Sundaresan, Mr. Zerick Dastur,
Ms. Archana Uppuluri, Mr. Kunal Kothary, Ms. Palak Agrawal,
Mr. Khushil Shah, Ms. Ruby Singh Ahuja and Mr. Anupam Prakash,
Advocates i/b Zerick Dastur Advocates & Solicitors for the Appellants.
 

Mr. Ravi Kadam, Senior Advocate with Mr. Kevic Setalvad, Senior
Advocate, Mr. Jayesh Ashar, Mr. Mihir Mody, Ms. Shreya Parikh,
Mr. Sushant Yadav and Mr. Tabish Mooman, Advocates i/b K. Ashar
& Co. for the Respondent.

WITH

Appeal No. 7 of 2018
Price Waterhouse, Bangalore,
a partnership firm registered with the Institute
of Chartered Accountants of India bearing
Registration No. 007568S.5th Floor, Tower D, The Millennia,
1 & 2 Murphy Road, Ulsoor, Bangalore - 560008. …Appellant

Versus

Securities and Exchange Board of India
SEBI Bhavan, Plot No. C-4A, G Block,
Bandra Kurla Complex, Bandra (East),
Mumbai - 400 051. … Respondent

Mr. Shyam Mehta, Senior Advocate with Mr. Zerick Dastur,
Ms. Archana Uppuluri, Mr. Kunal Kothary, Ms. Palak Agrawal and
Mr. Khushil Shah, Advocates i/b Zerick Dastur Advocates &
Solicitors for the Appellant.

Mr. Ravi Kadam, Senior Advocate with Mr. Kevic Setalvad, Senior
Advocate, Mr. Jayesh Ashar, Mr. Mihir Mody, Ms. Shreya Parikh,
Mr. Sushant Yadav and Mr. Tabish Mooman, Advocates i/b K. Ashar
& Co. for the Respondent.

WITH

Appeal No. 190 of 2018
S. Gopalakrishnan LH5, 1404, Lanco Hills,
Manikonda, Rajendra Nagar,
Hyderabad - 500 089. …Appellant

Versus

Securities and Exchange Board of India
SEBI Bhavan, Plot No. C-4A, G Block,
Bandra Kurla Complex, Bandra (East),
Mumbai - 400 051. …Respondent

Mr. Gaurav Joshi, Senior Advocate with Mr. R. Sudhinder,
Ms. Prerana Amitabh and Ms. Vatsala Pant, Advocates i/b Argus
Partners for the Appellant.

Mr. Ravi Kadam, Senior Advocate with Mr. Kevic Setalvad, Senior
Advocate, Mr. Jayesh Ashar, Mr. Mihir Mody, Ms. Shreya Parikh,
Mr. Sushant Yadav and Mr. Tabish Mooman, Advocates i/b K. Ashar
& Co. for the Respondent.

AND
Appeal No. 191 of 2018
Srinivas Talluri Flat No. 4B, Macherla Apartments,
6-3-1218/6, Umanagar, Begumpet,
Hyderabad - 500 016. … Appellant

Versus

Securities and Exchange Board of India
SEBI Bhavan, Plot No. C-4A, G Block,
Bandra Kurla Complex, Bandra (East),
Mumbai - 400 051. … Respondent

Mr. Mustafa Doctor, Senior Advocate with Mr. R. Sudhinder,
Ms. Prerana Amitabh and Ms. Vatsala Pant, Advocates i/b Argus
Partners for the Appellant.

Mr. Ravi Kadam, Senior Advocate with Mr. Kevic Setalvad, Senior
Advocate, Mr. Jayesh Ashar, Mr. Mihir Mody, Ms. Shreya Parikh,
Mr. Sushant Yadav and Mr. Tabish Mooman, Advocates i/b K. Ashar
& Co. for the Respondent.

CORAM: Justice Tarun Agarwala, Presiding Officer
Dr. C. K. G. Nair, Member
Per: Justice Tarun Agarwala, Presiding Officer

1. In this group of appeals, the appellants have questioned the legality and veracity of the impugned order passed by the Whole Time Member (hereinafter referred to as, ‘WTM’) of Securities and Exchange Board of India (hereinafter referred to as, ‘SEBI’) under Sections 11 and 11B of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as, ‘SEBI Act’) which empowers SEBI to issue directions in the nature of remedies in the interest of the securities market and investors in securities.

2. The WTM held that:-

(i) Entities / firms practicing 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.

(ii) Individual auditors, 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.

(iii) 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.

(iv) Listed companies and intermediaries registered with SEBI shall not engage any audit firm forming part of Price Waterhouse network for issuing any certificate with respect to compliance of statutory obligations which SEBI is competent to administer and enforce, under various laws for a period of two years.

3. Even though, separate appeals have been filed against a common order we have clubbed all these appeals and are being decided together by a common order.

4. Appeal No. 6 of 2018 has been filed by Price Waterhouse & Co. along with nine other Chartered Accountant (CA) firms under the banner “Price Waterhouse” (PW). Appeal No. 7 of 2018 has been filed by Price Waterhouse, Bangalore. Appeal No. 190 of 2018 has been filed by S. Gopalakrishnan and Appeal No. 191 of 2018 has been filed by Srinivas Talluri.

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