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India's Reliance Capital refutes ex-auditor's allegations

Reliance Capital Ltd. said its joint auditors and legal experts confirmed that the company did not commit any violations under India's companies law as alleged by its former auditor Price Waterhouse & Co. Chartered Accountants LLP.

The financial services company was responding to a letter filed by PWC with India's Ministry of Corporate Affairs under the country's companies law, which requires an auditor to immediately report a company's involvement in fraud to the government.

Reliance Capital said its board held a special meeting to review the letter. PWC resigned as the company's statutory auditor in June, claiming that certain actions of the company prevented it from performing its duties and exercising independent judgment. According to PWC, as part of the ongoing audit for fiscal year 2018-2019, "it noted certain observations/transactions which in its assessment, if not resolved satisfactorily, might be significant or material to the financial statements, and that it did not receive satisfactory response to its queries."

Reliance Capital's board refuted the allegations, saying PWC had duly audited the company's accounts for financial year 2017-2018, and conducted a limited review of its financial results of three consecutive quarters ended December 2018, without any qualifications or raising any concerns. It added that PWC's letter does not point to a single specific instance of the alleged fraud and that PWC had chosen not to attend the audit committee meeting June 12 despite being invited to do so.

The company's board also reaffirmed to take all appropriate steps to safeguard the interests of all stakeholders.