The regulator barred entities and firms rendering the services of chartered accountants in India under the banner of Price Waterhouse from issuing audit certificates.
"Any enforcement measure taken by Sebi with a preventive and remedial object, as envisaged under Section 11B of the Sebi Act, would not serve the goal unless the directions bring within its fold the PW network operating in India. The objective of insulating the securities market from such fraudulent accounting practices perpetrated by an worldwide firm of repute will be ineffective if the directions do not bring within its sweep the brand name PW", Sebi said in a 108-page order.
In its order, SEBI said while PwC's "loose-knit network arrangement" enabled partner firms to derive the advantage of its global brand value but did not lay down any supervisory mechanisms to check the quality of the performance of the firms.
In addition to barring PwC, Sebi has also ordered PwC and its two erstwhile partners who worked on the Satyam audit to pay Rs 130.9 million, along with interest at 12 per cent per annum from January 2009 on account of wrongful gains.
The order will come into force with immediate effect.
However, Sebi noted that the order would not impact audit assignments relating to the financial year 2017-18 undertaken by the firms forming part of the PW network.
The audit firm stands a better chance of getting a stay if it approaches the Securities Appellate Tribunal (SAT) instead of a court, said Sandeep Parekh, founder, Finsec Law Advisors and a former SEBI law officer.
"We are disappointed with the findings of the SEBI investigations and the adjudication order. Their interests are fully protected and we are hopeful of a positive verdict when we appeal against the Sebi order", said a senior PW executive.
The PW statement continued, "as we have said since 2009, there has been no intentional wrongdoing by PW firms in the unprecedented management perpetrated fraud at Satyam, nor have we seen any material evidence to the contrary".
Experts, however, said even if Price Waterhouse manages to get a court to issue a stay order on the SEBI ban, it faces the risk of losing clients.
The strict action came nine years after the Satyam scam came out.
The Satyam scam was unearthed in 2009, after the then Chairman of Satyam B Ramalinga Raju admitted in a letter to overstating the company's assets by Rs5,040cr.
The 108-page order, issued by Sebi's whole-time member G. Mahalingam, stems from the Satyam scandal of January 2009. In 2012, Satyam was sold to rival Tech Mahindra which dropped the brand.
PwC was Satyam's auditor during the period in which the fraud was perpetrated.
PW was the auditor of the company between 2000 and 2008.
"They might lose a lot of business on the other sides, not just audit, and they have to report it in other jurisdictions".