June 18, 2019

PwC Engages Top Indian Legal Firms After Anticipating Prolonged Legal Battle, Probe Into Reliance Capital’s Affairs

[ By Bobby Anthony ]


Auditing firm Price Waterhouse & Company (PwC) has hired three legal firms, namely Shardul Amarchand Mangaldas, J Sagar and AZB, after it resigned as the auditor of Anil Dhirubhai Ambani Group (ADAG) owned Reliance Capital and Reliance Home Finance recently.

The auditing firm is also understood to have approached a few other legal firms as well as legal luminaries in order to get further clarity about its legal position in the entire affair.

Expecting a prolonged legal battle after Price Waterhouse & Company resigned as the auditor of Anil Dhirubhai Ambani Group (ADAG) owned Reliance Capital and Reliance Home Finance, the auditing firm has given a brief to the three legal firms to prepare a defense against ADAG.

The legal firms have also been briefed to prepare a defense against government regulatory authorities as well as investigation agencies like the National Financial Reporting Authority (NFRA) and the Serious Fraud and Investigation Office (SFIO).

It is understood that Price Waterhouse & Company has apprehensions that the NFRA and the SFIO, both of which are Ministry of Corporate Affairs (MCA) agencies, are likely to initiate investigations very soon after it raised suspicions about alleged fraud in the two ADAG companies.

In this connection, it may be recalled that Reliance Capital had stated that it did not agree with Price Waterhouse & Company’s findings and would explore legal options.

Price Waterhouse & Company also anticipates the Securities Appellate Tribunal (SAT) to rule on Securities and Exchange Board of India’s (SEBI) ban on one of its affiliated audit firm.

Banking regulator Reserve Bank of India (RBI) has already banned EY for its role in auditing commercial banks, even as Deloitte and KPMG find themselves embroiled in the IL&FS imbroglio.

Therefore, Price Waterhouse & Company is understood to apprehend a threat as well, especially since all Big Four audit firms operating in India are also believed to be seeking legal advice.

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