The Institute of Chartered Accountants of India (Icai) has asked Price Waterhouse (PWC) India to show reasons why it should not be deregistered in regard to its association as auditor to Satyam Computer Services Ltd.

The notice by the institute, which regulates the profession of chartered accountants in the country, comes after US market regulator Securities Exchange Commission (SEC) on 6 April fined PW $6 million (Rs.26.7 crore). The firm has also agreed to pay $1.5 million to that country’s Public Company Accounting Oversight Board (PCAOB).

In January 2009, Satyam founder and former chairman B. Ramalinga Raju confessed to India’s biggest corporate swindle, saying he had fudged books to the tune of at least Rs.7,000 crore.

Icai is raising the issue on the ground that if PW has agreed to pay fines to US regulators as a firm, why shouldn’t action be taken against it as a firm in India, people aware of the development said on condition of anonymity.

PW has defended itself, saying the matter pertains to specific auditors and enquiry proceedings are ongoing, the people said.

“PW India has received letters from Icai concerning the recently announced settlements between PW India and its US regulators, the PCAOB and SEC,” the firm said. “Those settlements, in which PW India neither admits nor denies the regulators’ allegations, explicitly recognize and build upon the quality enhancements PW India put in place over the last two years. Further, the US orders confirm that PW India may continue to serve its clients.PW India fully cooperated with the US regulators during their investigations concerning the Satyam audits, justas it continues to cooperate fully with Icai’s similar enquiries and will respond to the Icai’s recent letters in due course.”

“We do not believe that there is any valid basis for de-registration. We instead believe that any resolution of Indian regulatory investigations should be premised on PW India continuing to audit its clients’ financial statements,” it added.

“As the SEC and PCAOB recognized in their orders, PW India has enhanced and will continue to improve its quality management systems while continuing to perform work for its clients based in India and abroad. We believe that PW India is fully qualified to serve its clients in both the Indian and global market places.”

An SEC statement earlier this month said PW affiliates in India have agreed not to take new US-based clients for six months. PW India has been questioned by regulators in the US and India for alleged involvement of its auditors Srinivas Talluri and S. Gopalakrishnan in the Satyam fraud.