A newly-constituted Division Bench at Bombay High Court will hear anew the petition filed by audit firm Price Waterhouse challenging the jurisdiction of capital market regulator SEBI to investigate its role in the multi-crore Satyam fraud.
This follows the decision of Mr Justice D. D. Sinha to recuse himself from hearing the case last week. “The petition will now come up before a new bench on July 29,” counsel arguing for one of the parties told Business Line on Wednesday.
The earlier Bench heard the case for three days and on the fourth day, one of the judges recused himself from hearing without citing any reason.
The new bench consisting of Mr Justice P.B. Majumdar and Mr Justice R.M. Savant will hear the case ‘de novo’, counsel said.
The audit firm is seeking a stay on the SEBI proceeding against it in the Satyam case.
SEBI, which is investigating the Satyam scam, had issued a show cause notice to Price Waterhouse alleging that the partners of its Hyderabad arm were involved in falsification of Satyam accounts.
Price Waterhouse’s contention is said to be that audit firms are not market intermediaries regulated by SEBI. They are registered with the Institute of Chartered Accountants of India and are accountable to it for any professional lapses. So SEBI has no jurisdiction to investigate its role in the Satyam case, goes audit firm’s argument.
SEBI has been hearing the case for the past few months. During the hearing earlier, Price Waterhouse had sought a separate ruling from SEBI on its jurisdiction to investigate auditors, before proceeding to the merit of the case.
Price Waterhouse, according to sources, has chosen to move court because it apprehends that SEBI may refuse to entertain its plea for a separate ruling on its jurisdiction.
The audit firm had earlier approached SEBI for a consent settlement of the case which the regulator had rejected. A second application filed for a settlement is still pending.
The next hearing of the case before SEBI is scheduled for August 2. This means, SEBI may await for the Court verdict before issuing its own order.