PwC could face legal action over Satyam scandal

9 January 2009

Auditing firm PricewaterhouseCoopers (PwC) could face class action lawsuits from investors in the IT outsourcing giant Satyam after the company's chairman admitted to carrying out a $1 billion accounting fraud, it has been reported.

City AM said there is "growing pressure" on PwC because of its apparent failure, as Satyam's auditor, to detect any wrongdoing.
It added that investors in India and the United States could take action against the firm. Satyam shares, which crashed by approximately 80 per cent on the news of the fraud, are listed on the Mumbai and New York stock exchanges.

Ravi Nath of New Delhi law firm Rajinder Narain told the site that on first impressions, there appears to be "grounds to proceed" against PwC.

Meanwhile, Kenneth Vianale, a US attorney whose firm is already pursuing a class action against Satyam, said his practice would also consider pursuing PwC if it was found to have acted irresponsibly.

"There is most definitely an appetite for action against PwC," he commented.

PwC is one of the world's largest accountancy firms, employing 155,000 people in 150 countries.

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development