Satyam: HC rejects auditors plea on disciplinary action

PricewaterhouseCoopers auditors, Subramani Gopalakrishnan and Srinivas Talluri, accused in the Rs 14,000 crore Satyam accounting fraud, today received a jolt as the Delhi High Court today rejected their pleas against the disciplinary proceedings initiated by the ICAI.

A bench of Chief Justice Dipak Misra and Justice Sanjiv Khanna dismissed the petitions filed by the two auditors, who had sought a stay on disciplinary proceedings initiated by Institute of Chartered Accountants of India (ICAI) for their alleged involvement in the Satyam accounting fraud.

The regulatory body of chartered accountants had initiated separate disciplinary proceedings against the official auditors of the scam-hit Satyam Computers after its founder-promoter B Ramalinga Raju confessed fudging the accounts.

The proceedings were sought to be initiated by ICAI on the ground that despite they being the official auditors of the IT major, how come such an accounting fraud went undetected.

The auditors were seeking a stay on ICAI action till the conclusion of the criminal proceedings.The High Court's verdict came on separate petitions filed by two auditors against the order of a judge, which allowed ICAI to initiate disciplinary actions against them. Upholding the order of the judge, the court has now paved the way for initiation of disciplinary proceedings against Gopalakrishnan and Talluri. "The court has directed ICAI to hold the hearings on regular intervals and conclude the matter on a fast track basis," ICAI said.

Earlier, in 2009, ICAI had set up a six-member special committee to look into the auditing of fraud-hit Satyam Computer Services (now Mahindra Satyam), whose former founder-Chairman B Ramalinga Raju fudged the accounts of the Hyderabad-based IT major.