PwC Resignation as Auditor of Reliance Capital, Reliance Home Finance Comes Under SEBI, Government Scanner
Markets regulator Securities and Exchange Board of India and the corporate affairs ministry are looking into PricewaterhouseCoopers’ resignation as statutory auditor of Reliance Capital Ltd. and Reliance Home Finance Ltd.
Both SEBI and the corporate affairs ministry have asked the stock exchanges to collect all necessary information, including trade details and statements, made by the three entities.
The development assumes significance in the wake of auditors’ role coming under the scanner of multiple agencies in cases involving various corporate houses, including listed companies.
SEBI, the corporate affairs ministry and the exchanges may also seek additional details from PwC, Reliance Capital and Reliance Home Finance, if required, said senior officials aware of the development.
On Thursday, Reliance Capital said its continuing auditor Pathak H.D. & Associates has been mandated by the audit committee to submit its independent report on PwC's observations within 15 days.
On Wednesday, the Anil Ambani companies said PwC has resigned as statutory auditor of both the companies. PwC put in its resignation, with effect from June 11, 2019, citing unsatisfactory response to "certain observations" made by it as a part of the ongoing audit for 2018-19, the two companies had said in regulatory filings.
Both Reliance Capital and Reliance Home Finance said they did "not agree with the reasons given by PwC" for its resignation.
"PwC's observations are completely baseless and unjustified. PwC acted prematurely without even statutory discussions with the audit committee," Reliance Capital said in a regulatory filing on Thursday.
On Thursday, Reliance Home Finance shares fell 12.32 percent to Rs 14.95 apiece on the BSE while Reliance Capital shares shed 3.54 percent to Rs 84.40. The benchmark Sensex ended the day little changed at 39,741.36 points.