Beena Parmar Moneycontrol News
Former Chief Justice of Delhi High Court A.P. Shah has written to the Prime Minister Narendra Modi and Finance Minister Arun Jaitley to take immediate action against PricewaterhouseCoopers (PwC) India for allegedly posing threat to national interests.
Shah heads the Citizens Whistle Blowers Forum (CWBF).
In a letter, the Delhi-based forum said: "A number of highly disconcerting issues involving PwC, which pose serious threat to national interests, safety of investments of common man, result in significant losses to the public exchequer and which expose lack of efficacy of controls in the banking system have come to the notice of the CWBF."
"Further PwC has been found guilty of criminal acts by the Serious Frauds Investigation Office (SFIO) and by the Special CBI Court. Despite this, PwC is being rewarded with significant government business including those where there are direct conflicts of interest."
The Forum has members such as former Finance secretary – Economic Affairs E.A.S. Sarma, Senior Advocate and PIL activist Prashant Bhushan, former IAS and social activist Aruna Roy, former Finance Secretary EAS Sarma, former Professor at IIM A Jagdeep Chhokar, former Indian Navy chief Admiral Lara Ramdas and former Chief Information Commissioner Wajahat Habibullah, former Chief Election Commissioner.
The letter, sent on Monday, highlights major scams like the Satyam scam (which involved Pricewaterhouse and not Pricewaterhouse coopers), Global Trust Bank scam, Kingfisher/USL/Vijay Mallya scam involving PwC and other violations of FDI policy, evasion of income tax, falsification of their own books of accounts by PWC, alleging “some of the violations amount to criminal offences under the Indian Penal Code (IPC). Yet not only does it continue to go scot free but is rewarded with significant government business!”
The copies of the letter had also been sent to the Central Bureau of Investigation (CBI), retired Justice M.B. Shah who is the chairman of SIT on black money, Reserve Bank of India and the Enforcement Directorate.
Reacting to the letter, PWC in a statement told Moneycontrol: "We deny the allegations made. Price Waterhouse has always complied and will continue to comply with applicable laws and regulations and any suggestion to the contrary is merely speculative"
Last month, SEBI chairman Ajay Tyagi had said that the Bombay High Court has ruled that SEBI does have jurisdiction on auditors as public shareholders can be affected by their actions.
When asked if SEBI had powers to ban an auditor from dealing with listed companies, he said that “theoretically, it can happen... SEBI can issue directions” if an audit has not been done properly as shareholders were dependent on it.
In 2010, SEBI had issued a show-cause notice to Price Waterhouse, among many other entities, after it emerged that the accounts of Satyam were falsified and inflated.
In Satyam scam, it points out that “Raju (Satyam founder and then chief) and their PWC auditors managed to get their sentences suspended and obtained bail within a month from a Sessions court, Hyderabad”. In the Global Trust Bank scam “cost of inaction by ICAI was extremely high. Thousands of public investors lost their hard earned savings”.
The letter (accessed by Moneycontrol) noted that a lot of benami transactions and violations of norms were overlooked and there was leniency on the part of regulators, banks and the government and “if left unaddressed will pose serious threats to public interest and national security”.
It has urged the government to immediately implement the Joint Parliamentary Committee recommendations to take action in the GTB scam, various litigations in the Satyam scam, order a time-bound investigation and terminate all existing government contracts to PwC among others.
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