Sebi had issued a show-cause notice to PWC, which it had challenged, saying that market regulator cannot regulate chartered accountants.
A division bench of Justices P B Majmudar and R M Savant has dismissed PWC’s petition, but since PWC wants to file an appeal in the Supreme Court, the court asked Sebi not to start an inquiry for next four weeks.
PWC, which had been associated with Satyam for several years as auditors, had contended that only Institute of Chartered Accountants of India can hold inquiry with regard to its professional conduct.
Sebi had issued a show cause notice to PWC asking it to explain why it had kept quiet about murky financial dealings of Satyam, although it was associated with the company for several years.
Sebi’s lawyer argued that auditors have a “direct, fiduciary relationship with shareholders” and shareholders incurred losses for decisions taken by them based on Satyam’s balance sheet. PWC, meanwhile, said it would consider various options, including filing an appeal in the Supreme Court against the order of the High Court.
The Bombay High Court, while dismissing the petition, noted that some of the partners of the firm were arrested when Satyam scam came to light, and they were accused of manipulating the Satyam account books to conceal the fraud.
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