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Prosecutions have been filed under the provisions of Companies Act against partners of PriceWaterhouse (PwC) in nine firms, union minister Arjun Ram Meghwal said today. However, specific details were not disclosed. In a written reply to the Lok Sabha, the Minister of State for Corporate Affairs said, "prosecutions under the provisions of Companies Act, 1956 have been filed against the partners of PwC in nine companies". He was responding to a query on whether the government has taken cognizance of several instances of violations by auditor PwC and its partner firms over the last 10 years that pose serious threats to public interest and national security. Under the Companies Act, there are stringent provisions to deal with violations by auditors. If an auditor contravenes provisions under the law knowingly or wilfully with intention to deceive the firm or its shareholders, creditors, tax authorities, then such acts would be punishable with imprisonment of one year and a fine of at least Rs 1 lakh.
The penalty can go up to Rs 25 lakh. Besides, if an audit is conducted by an audit firm and there is any fraud or collusion in fraud, concerned partners of the audit firm as well as the audit firm are jointly and severally liable. In a separate written reply, Meghwal said no rise of unhealthy competition in the telecom sector has come to the notice of the ministry. He said that information and complaints received by the Competition Commission of India (CCI) from time to time are processed as per laid down procedure and is an ongoing process. The CCI comes under the corporate affairs ministry. "The Telecom Regulatory Authority of India (TRAI) has informed that attracting the customers by adopting illegal offers has not been noticed by TRAI," Meghwal added.
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