MUMBAI: Price Waterhouse & Co, an affiliate of PricewaterhouseCoopers, has hired three law firms as it expects a legal tussle to erupt following its decision to resign as the auditor of Reliance Capital and Reliance Home Finance
PwC has engaged Shardul Amarchand Mangaldas, J Sagar and AZB, and asked them to prepare a defence against not just the Anil Ambani-led Reliance Group but also regulators and probe agencies such as the National Financial Authority (NFRA) and the Serious Fraud and Investigation Office (SFIO).
Shardul Amarchand Mangaldas declined to comment, while the other two law firms and PwC didn’t respond to emails seeking comment until press time Monday.
According to the people in the know, PwC fears the NFRA and SFIO, which are both part of the Ministry of Corporate Affairs (MCA), may launch probes in the coming weeks after it raised suspicion of fraud in the two Reliance Group firms. As of now, no one has launched any investigation, said one of the people. Fearing legal action after Reliance Capital said it didn’t agree with the auditor’s findings and was exploring legal options, PwC representative met at least 7-8 different law firms and legal luminaries to get a clear picture of its legal position in the matter, the people said. In the next few days, PwC also expects the Securities Appellate Tribunal to rule on Securities and Exchange Board of India’s ban on an affiliated audit firm. Firms often hire top law firms and, in some cases, counsels in a bid to keep out the other party from accessing the best legal sources. With Deloitte and KPMG caught in the IL&FS mess, the RBI ban on EY for auditing commercial banks and now PwC facing the new threat, all the Big Four accounting firms are actively seeking legal support in India.
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