PricewaterhouseCoopers gets Supreme Court notice over 'financial malpractices'

Dec 06 2013, 22:37 IST
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Audit firm PwC has been accused of financial malpractices and other illegalities. Audit firm PwC has been accused of financial malpractices and other illegalities.
SummaryA PIL in Supreme Court seeks probe vs PricewaterhouseCoopers and 12 other firms.

The Supreme Court on Friday issued notices to UK-based multinational accounting firm PricewaterhouseCoopers and the Centre on a public interest litigation (PIL) demanding in-depth probe into alleged financial malpractices and other illegalities by the audit firm.

The PIL, filed by NGO 'CPIL', sought probe against PricewaterhouseCoopers and 12 other firms under its umbrella for alleged income tax violations, breach of FEMA and RBI guidelines, FDI violations and various other rules and regulations.

A bench led by Chief Justice P Sathasivam sought replies from PricewaterhouseCoopers and its six network firms, besides the RBI, ED, Income Tax department Central Board of Direct Taxes (CBDT), the Institute of Chartered Accountants of India (ICAI), within four weeks.

The NGO has contended that the huge inflow of funds in violation of FDI policy as well as RBI and FEMA rules "raises serious apprehensions about the end use" of the money.

The NGO alleged that payments worth hundreds of crore of rupees, by way of subsidies, export incentives, grants, etc, are done based on certification of the auditors and, "it is, therefore, imperative their certification is absolutely correct and sacrosanct as otherwise it would cause humongous loss to public exchequer."

The NGO in its petition also alleged that PwC and the firms sharing its brand name are also involved in auditing of government and international contracts running into lakhs of crore of rupees and some of their important clients include Ministry of Defence, Ministry of Environment, Indian Oil Corporation, Delhi Jal Board, etc.

Referring to the the 2009 Satyam scam, wherein the company's account had been falsified, the NGO contended that one of PwC's network audit firms, Price Waterhouse Bangalore, was the auditor of the erstwhile Satyam Computer Services Ltd for more than eight years and it had failed to discover the fudging of accounts. (With PTI inputs)

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