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Last Updated : Jun 12, 2019 01:05 PM IST | Source: Moneycontrol.com

Reliance Capital, Rel Home Finance plunge 7% after statutory auditor resigns

Reliance Capital and Reliance Home Finance further said they do not agree with the reasons given by PWC for the resignation

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Shares of Reliance Capital tanked 6.76 percent and Reliance Home Finance fell 7.88 percent intraday on June 12 after their statutory auditor Price Waterhouse & Co Chartered Accountants LLP resigned.

The Audit Committee and Board are meeting on June 12 and will decide upon the new Statutory Auditor, Reliance Home Finance said while Reliance Capital said its other duly appointed auditor, Pathak H D & Associates, whose term is valid until conclusion of the AGM for the year ended March 31, 2021, will continue as the sole statutory auditor.

"Price Waterhouse & Co Chartered Accountants LLP (PWC) resigned as the statutory auditors of the company with effect from June 11," the Anil Dhirubhai Ambani Group companies said in a BSE filing.

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Reliance Capital and Reliance Home Finance further said they do not agree with the reasons given by PWC for the resignation. "... duly responded to the various queries and letters of PWC and also duly and validly convened a meeting of the Audit Committee on June 12, 2019 to further respond to the letter dated May 14, 2019 from PWC."

While resigning, PWC had stated that as part of the ongoing audit for FY19, it noted certain observations/transactions which in its assessment, if not resolved satisfactorily, might be significant or material to the financial statements. Further, it said it did not receive a satisfactory response to its queries.

PWC has further stated that though it sent a letter dated April 18, 2019 under relevant provisions of the Companies Act, companies disputed the same to be in accordance with the provisions of law, notwithstanding a subsequent letter issued by PWC on May 14, 2019 to reiterate the intent of letter issued on April 18, 2019, and companies did not convene an audit committee meeting within the expected time.

Companies also stated that it might initiate appropriate legal proceedings against the firm.

According to PWC, these actions by companies have prevented it from performing its duties as statutory auditors and exercising independent judgment in making a report to the members of companies, and impaired its independence, and hence, it is no longer in a position to complete the audit and instead feels compelled to withdraw from the audit engagement and resign.

At 1230 hours IST, Reliance Home Finance was down 3.38 percent at Rs 17.15 and Reliance Capital was down 1.97 percent at Rs 92.05 on the BSE.

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First Published on Jun 12, 2019 01:05 pm
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