PwC moves to Securities Appellate Tribunal against SEBI order

Price Waterhouse & Co. (PwC) has filed an appeal with the Securities Appellate Tribunal (SAT) against an order passed by the Securities and Exchange Board of India (SEBI) last week. .The SEBI in its order, among others, has prohibited PwC and its network entities in India from issuing audit certificates to any listed company in India for a period of two years..The appeal has been moved on the basis of a Bombay High Court judgment passed on August 13, 2010 where PwC has (unsuccessfully) challenged the issuance of Show Cause Notices by the SEBI, arguing lack of jurisdiction..While the Bench dismissed the petition, upholding the jurisdiction of SEBI to probe such matters, it did set certain standards which must be adhered to, to establish guilt. The High Court said that SEBI can proceed only where there is mens rea and criminality..The present appeal seeks to challenge the SEBI order against PwC on the grounds that SEBI has failed to adhere to the standards laid down by the Bombay High Court with respect to the evidence required to pass such orders i.e., evidence to show that the acts or omissions allegedly committed by the auditors indicates knowledge/ intention/ complicity/ connivance in the accounting fraud that was perpetrated in Sahara..The appeal has been filed by Zerick Dastur Advocates and Solicitors. Zerick Dastur has briefed Senior Advocate Janak Dwarkadas along with Counsel Somasekhar Sundaresan.