Tip of the iceberg? PwC has a long history of controversies in India

Capital-market regulator Sebi's ban on Price Waterhouse from auditing listed companies in India for two years for its role in the Satyam Computer Services scam is not the only trouble for global auditing firm PwC that operates with a network of entities in India. PwC and its related entities in India have for long been in controversies. Below is a listing of major controversies the firm and its entities have landed in recent times:

The Sarvesh Mathur case
Sarvesh Mathur, who was CFO of PricewaterhouseCoopers Private Ltd (PwCPL) between 2008 and 2011, filed a defamation suit in July last year accusing his erstwhile employer of cooking books, evading tax, wilfully breaking several laws and then intimidating, cheating and tarnishing his name when he refused to help cover-up the white-collar crimes. He alleged in his complaint that the company falsified its accounts on several occasions, destroyed evidence and lied to government officials. In one instance in 2010, the complaint says, a PwCPL senior official helped adjust Rs 5 crore “outside the system". A PwC spokesperson had denied the allegations, saying, "This is in a long series of defamatory attempts made against PwC by persons who seem to be acting in consort with each other with the sole purpose to harass and bring the name of PwC under disrepute."

Justice Shah's letter
In July last year, former chief justice of the Delhi High Court AP Shah wrote to the Prime Minister, questioning PwC’s integrity and competence to render audit and advisory services to clients, including the government. He listed several instances of violations by auditor PwC and its partner firms. Justice Shah, writing on behalf of Citizens Whistle Blowers Forum said, “…violations by PwC member firms in India perhaps represent only the tip of the ice-berg and if left un-addressed will pose serious threats to public interest and national security." PwC had said at that time that it had always complied and would continue to comply with applicable laws and regulations and any suggestion to the contrary was merely speculative.

MP Kirit Somaiya's complaint
In March last year, ruling BJP's Lok Sabha MP Kirit Somaiya posted on Twitter document according to which he demanded action against PwC network for its alleged role in various scams related to Global Trust Bank, Satyam and Vijay Mallya/Kingfisher airlines/UB group. He claimed that a Joint Parliamentary Committee had recommended strong action against PwC for its alleged role in the Global Trust Bank scam.

Leaking of official documents
An official of PwC came under CBI scanner in connection with the alleged sale of confidential government documents on foreign investment policies to corporate groups by officials, PTI reported in March 2015. It cited CBI sources as saying that during the questioning of five arrested persons in the case, it had come to light that an official of PwC was allegedly procuring documents from the Department of Economic Affairs, under the Finance Ministry, through Khemchand Gandhi, Chartered Accountant, arrested by the agency. The confidential documents related to foreign direct investment policies being considered in the government.


Prashant Bhushan's petition
In a petition to the Supreme Court in 2013, Center for Public Interest, a non-profit organisation headed by activist-lawyer Prashant Bhushan, sought a probe into allegations of irregularities and malpractices by PwC and its related companies. The NGO alleged that PwC and its related firms had violated FDI norms. In 2016, the Supreme Court directed the Institute of Chartered Accountants of India (ICAI) to submit a status report on the probe into allegations of FDI violations by PwC.

The Nokia probe
In 2013, PwC was questioned by tax authorities investigating possible tax evasion by Finnish phone-maker Nokia. An ET report had cited a source in the income tax department as saying, "The evidence gathered so far clearly indicates that PwC has advised Nokia and they were aware of the tax evaded and accounting practices. PwC are the auditors for Nokia and they may face prosecution from Income-Tax department." The questioning of PwC began a few days after the tax officials raided Nokia India's factory near Chennai.