Reliance Capital Board denies PWC's violation charges

Reliance Capital has said that its Board of Directors did not find any violations as alleged by Price Waterhouse & Co, Chartered Accountants LLP (PWC) under Section 143(12) of the Companies Act, 2013. A special meeting to this effect was held by the company Board to review the matters arising out of a letter filed by PWC with the Ministry of Corporate Affairs (MCA) on Thursday.

"The Board took note of the views of the other joint auditors, who have been auditors of the company for the last three financial years and continue as the sole statutory auditors of the company, confirming that there are no violations as alleged by PWC under Section 143(12) of the Companies Act, 2013," Reliance Capital Ltd (RCL) said in a media statement.

The decision was taken by the RCL Board after considering facts like PWC had chosen not to attend the Audit Committee meeting on June 12, despite being invited to do so. It abruptly resigned at the unearthly hour of 4.32 am on June 11, 2019, and filed its letter with MCA later the same day. PWC also did not share a copy of its letter with RCL and the Board's independent Audit Committee, despite repeated requests.

"The Board reaffirmed to take all appropriate steps to safeguard the interests of all stakeholders," RCL said in a statement.

The RCL Board also noted that PWC had duly audited the company's accounts for the financial year 2017 – 2018, as also a limited review of financial results of three consecutive quarters ended December 2018, without any qualifications or raising any concerns.

While taking note of the views of legal experts who independently carried out an in-depth examination of the matter and the issues raised by PWC, the RCL Board noted the independent legal opinion from reputed law firm confirming that there was no violation attracting Section 143(12) of the Companies Act, and which concluded that the PWC letter is devoid of any rationale or basis and is invalid. 'An independent legal opinion from a senior counsel also re-confirmed that there were no violations', RCL said in the statement.

The Board further noted that the alleged basis relied upon by PWC for reporting under Section 143(12) is itself grossly inadequate, and does not even point to a single specific instance of the alleged fraud.