PwC quits as statutory auditors of Reliance Capital

Anil Ambani-led Reliance Capital's statutory auditor Price Waterhouse & Co Chartered Accountants LLP (PwC) has resigned with effect from Tuesday.

PwC said that as part of the ongoing audit for 2018-19, it did not receive a satisfactory response to its queries following certain observations and transactions. If not resolved satisfactorily, they might be significant or material to the financial statements, said the auditing firm.

PwC said Reliance Capital disputed the observations highlighted by it and did not convene an audit committee meeting within the expected time. The company also stated that it might initiate appropriate legal proceedings against the auditing firm.

According to PwC, these actions by the company prevented it from performing its duties as statutory auditors and exercising independent judgment in making a report to members of the company. This impaired its independence and hence it is no longer in a position to complete the audit, and instead feels compelled to withdraw from the audit engagement and resign.

Reliance Capital's board of directors accepted the resignation. "The other duly appointed auditor Pathak HD & Associates, whose term is valid until conclusion of the annual general meeting for the year ended March 31, 2021 has confirmed that it will continue as the sole statutory auditor," the company said in a statement.

Reliance Capital did not agree with the reasons given by PWC for the resignation. "The company has duly responded to various queries and letters of PwC and has also duly and validly convened a meeting of the audit committee on June 12 to further respond to the letter dated May 14 from PwC," said Reliance Capital in a statement.