Anti-Graft Forum Questions Centre’s Appointment of Firm Accused of Scams for Black Money Probes

PricewaterhouseCoopers, convicted in the Rs 7,000 crore Satyam scam, had also audited accounts of Vijay Mallya’s firm and the Global Trust Bank, which collapsed.

PwC’s operation in India itself has been questioned by the group. Credit: PTI

PwC’s operation in India itself has been questioned by the group. Credit: PTI

New Delhi: The Narendra Modi government’s appointment of PricewaterhouseCoopers (PwC) India to key projects like black money probes, Digital India, Make in India and Smart Cities project has been questioned by the Citizens Whistleblowers Forum. The group has also expressed concern over the RBI’s engagement of the auditing firm to help conduct the audit of its information systems.

The firm has repeatedly been found fudging its own accounts and filing false audit reports on behalf of various companies involved in major scams, including Satyam, Global Trust Bank (GTB) and liquor baron Vijay Mallya’s firms.

PwC accused of various wrongdoings

Releasing a statement titled ‘Is PwC above the law’ at the first conference organised by the forum, Prashant Bhushan, a member of the forum, said it should be noted that the Modi government appointed PwC India as its consultant for black money probes through the income tax department. This was done despite the firm having been found guilty in scams, frauds, fudging of accounts, falsification of documents and even being convicted in the Rs 7,000 crore Satyam scam.

Recounting PwC’s tryst with the law enforcement agencies, Bhushan said the company has in the past been found guilty by the joint parliamentary committee (JPC) but action has been pending for the last 14 years. He said the Supreme Court had also directed the Securities and Exchange Board of India (SEBI) on January 10 to expedite its enquiry against PwC in the Satyam matter, which too has been languishing since 2010.

In Satyam scam, government did not contest suspension of seven-year term

The advocate-activist said the Serious Fraud Investigation Office, which comes under the Ministry of Corporate Affairs, had in 2009 and the Central Bureau of India had in 2015 found PwC partners guilty of knowingly signing fudged accounts of Satyam – the biggest scam in the history of corporate India. However, the forum noted that within a month, a sessions court had suspended their seven-year imprisonment sentence and there has been no progress in the case since.

On the involvement of the auditing firm with Mallya, the forum said “Rs 1225 crores [was] diverted from United Spirits Ltd. during October 2010 and July 2014”. But while PwC were the auditors till 2011, he said no action was taken against them by either SEBI or the Institute of Chartered Accountants of India (ICAI) even after two years of the matter coming into the public domain and despite ICAI being the regulator for the accounting and auditing profession in India.

‘PwC operation in India is questionable’

In fact, Bhushan said PwC’s operation in India is itself questionable since foreign CA firms are not permitted to practice in the country. “But the company says it has nothing to do with a foreign entity by the same name and claims to be independent. However, we have noticed that Rs 41 crores were transferred to PwC India office in Kolkata and was subsequently used by its partners to purchase an Indian chartered accountancy company. Similarly, Rs 500 crores was sent to India by its Dutch arm and the money was used to create a loan and it disappeared thereafter,” he said.

“Investigation by the Registrar of Companies and MCA had found that 15 directors, including four chairmen, were guilty of falsification of their own books of accounts and various other offences under the Companies Act over a four year period but the offence was compounded,” Bhushan added.

Modi regime wants a pliable auditor, consultant

On why the Modi government is continuing with the services of the company despite its murky past, Bhushan said “The governments want to give credibility to their accounts through such audit firms and which could be more pliable for them than one whose officials can be sent behind bars or fined thousands of crores”.

Bhushan also expressed concern over RBI allowing PwC access to its information systems for conducting the audit saying this would put all sensitive information of the RBI into their domain.

Government has no moral business to take advice from such firm’

Another member of the forum, Jagdeep Chhokar, who is also the founder and trustee of the Association for Democratic Reforms, commented that PwC was probably chosen for the task of finding black money because the company know how it is created. He insisted that considering the track record of the company, “the government has no moral business to take advice from them”.

In light of these findings, the forum has demanded immediate steps for implementing JPC recommendations, action in the GTB scam and finalisation of Satyam and other scam cases. It has also sought a probe into PwC’s own operations and accounts, registration of first information reports against its partners and directors accused of wrongdoing and termination of all government contracts awarded to it.

Two other members of the forum, Admiral (Retd.) L. Ramdas and former chief information commissioner Wajahat Habibullah also attended the press conference.

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