Ministry of Corporate Affairs to seek clarificiation from PWC, Reliance Capital

The Ministry of Corporate Affairs (MCA) will seek clarification from auditor Price Waterhouse & Co (PWC), Reliance Capital and Reliance Home Finance over the former’s decision to resign as the auditor of the two ADAG firms. The ministry will seek clarification to ascertain the facts and allegations made by both sides. MCA may also refer the matter to the National Financial Reporting Authority for further inquiry.  

Price Waterhouse & Co had resigned as statutory auditor of Reliance Capital and Reliance Home Finance on June 11. PWC said in its resignation letter to the company board that  “We did not receive substantive/satisfactory responses to our queries in light of our observations”.  It also said that “ the Company has failed to call the audit committee meetings within the statutory period of 45 days from the date of our letter dated April 24, 2019”. 

The auditor has sent a letter on 24th under Section 143 (12) of the Companies Act 2013 read with rule 13(2)(a) of the Companies (Audit and Auditor) Rules 2014 to the management and Audit Committee of the Company.

Reliance Capital called PWC’s observations completely baseless and unjustified. It said PWC has acted prematurely without even discussing with the Audit Committee. 

It also clarified on legal proceedings that the same would be initiated only if so legally advised, that too if required to protect the interests of all stakeholders, and it is hard to see how PWC has taken exception to this approach. Shares of Reliance Capital closed at Rs 84.45 down 4.14% and Reliance Home Finance shares closed down at Rs14.85 down 13.16%.  

— Zee Media Newsroom