Competitors say Satyam verdict will haunt PriceWaterhouseCoopers

MUMBAI: For Price Waterhouse (PW), an arm of PriceWaterhouseCoopers (PwC) India, the Satyam verdict where two of its former employees were convicted, could prove more costly in the next two years, say industry trackers. The verdict coincides with the time when many Indian companies are preparing for audit rotation, a mandatory rotation of their auditors beginning April 2017. Although there would be no direct impact of the verdict on PwC, say industry trackers, the timing the verdict could not have been worse.

Six years after the Satyam fraud, Ramalinga Raju was on Thursday convicted to seven years in prison and a Rs 5-crore fine. Two auditors – Subramani Gopalakrishnan and T Srinivas-––who were part of PW earlier were also convicted by the special court. The CA institute—ICAI —in 2012 had already removed both the auditors from their books. “Under the CA Act we took the strictest action against them (Gopalakrishnan and Srinivas) and this was much before the court took the action,” said Manoj Fadnis, president, ICAI. “Although I would say that the Satyam fraud is an aberration and that most of the professionals operate with utmost sincerity,” he added.

Competitors feel that the ghost of Satyam will continue to haunt PwC. “Some companies would start looking at audit rotation in next six-months, and a mere reminder of Satyam around the same time could make many companies nervous,” said the India head of one of the big four.