Taking note of a PIL filed by Prashant Bhushan for the Centre for Public Interest Litigation, the Supreme Court today gave four weeks for replies from the firm as well as a host of government authorities and regulators like the Reserve Bank of India.
Almost two years after CNBC-TV18 first reported the details of alleged violations of FDI norms by PwC India, the matter has reached the courts. Taking note of a PIL filed by Prashant Bhushan for the Centre for Public Interest Litigation, the Supreme Court today gave four weeks for replies from the firm as well as a host of government authorities and regulators like the Reserve Bank of India. CNBC-TV18’s Anshu Sharma and Malvika Jain report.
Prashant Bhushan's plaint levels several serious charges against the storied audit and consulting firm – Pricewaterhouse India – including receiving undisclosed foreign funds, unexplained loans to partners and incorrect accounting.
The charges are part of a 64 page PIL, that the Supreme Court took note of today. Notices have been issued to the RBI, the accounting regulator - the ICAI, the Enforcement Directorate and the taxman - as well as the 11-member PwC India network. This development comes two years after CNBC TV18 first reported the alleged violations.
Bhushan has sought the Courts intervention on why no investigation has been carried out so far against PwC member firms - 10 audit firms and one private company - despite repeated allegations of wrongdoing. CPIL alleges violations of the Income Tax Act, the Chartered Accountants Act, the Foreign Exchange Management Act, the Companies Act, RBI and FDI regulations. The petition pin-points three instances of alleged financial irregularities and violations by PwC India.
* Inflow of undisclosed foreign funds of nearly Rs 240 crore in various Pwc India entities in FY10 and FY11.
* Receipt of unexplained credits of around Rs 41 crore received by Price Waterhouse & Co. Kolkata, for the purpose of acquiring another audit firm, Dalal and Shah Mumbai, via a circuitous route.
*Incorrect accounting of insurance premium payment by PwC India. While only three firms of Pwc India paid towards insurance premium, all 11 entities enjoyed the benefits.
In addition to seeking investigation against PwC India, Prashant Bhushan has also suggested that falsification of accounts should be made a non-bailable offence and that the government should appoint an independent regulator for auditors. A bench headed by Chief Justice P. Sathasivam said the issues raised in the plea need "examination". The next date for hearing has not yet been fixed.The Great Diwali Discount!
Unlock 75% more savings this festive season. Get Moneycontrol Pro for a year for Rs 289 only.
Coupon code: DIWALI. Offer valid till 10th November, 2019 .