SEBI can proceed against PW in Satyam scam: Bombay HC

It was judgment day in the Securities and Exchange Board of India (SEBI)-Price Waterhouse (PW) tussle. The Bombay High Court has ruled that SEBI has power to proceed against PW in the Satyam scam case, reports CNBC-TV18's Ashwin Mohan.

Here is a verbatim transcript of Ashwin Mohan's comments on CNBC-TV18. Also watch the accompanying video.

This is indeed significant legal development that has taken place at the Bombay High Court. Significantly, the Bombay High Court has said that SEBI has the power to proceed in its enquiry against Price Waterhouse in relation to the Satyam scam.

Remember, SEBI had issued show cause notices to Price Waterhouse in relation to the Satyam Scam under Fraudulent & Unfair Trade Practices (FUTP) regulation. Price Waterhouse had moved the Bombay High Court saying that SEBI has no jurisdiction.

What the Bombay High Court has said today is that SEBI can proceed in this enquiry against PW safe guarding the interest of investors as well as market as a whole. The Bombay High Court judgment has also observed that the SEBI has the power to give direction under SEBI Act.

Now, this power of SEBI to give directions under the SEBI act will be decided by SEBI itself, based on the available evidence on record. So, once the enquiry of SEBI takes place and once the evidence comes on record, based on that evidence SEBI will decide whether it has the power to give any directions to PW under the SEBI Act.

The third important line and which the Bombay High Court has categorically said is that SEBI will not pass any order prohibiting the practice of any professional chartered accountant or CA that the Bombay High Court says that power rests only with the accounting regulator, Chartered Accountants in India (ICAI). So, these are the three brief and the significant points that Bombay High Court has just pointed out.