Slamming Price Waterhouse & Co's recent allegations of violation of the Companies Act 2013 by Reliance Capital, the company on Thursday said that the audit firm's recent letter to the Ministry of Corporate Affairs was invalid.
The company board met earlier in the day to review the matters arising out of the letter filed by PwC with the Ministry of Corporate Affairs (MCA), under Section 143(12) of the Companies Act, 2013.
A company statement said 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.
"The Board also noted that PwC had duly audited the accounts for the financial year 2017-2018, as also limited review of financial results of three consecutive quarters ended December 2018, without any qualifications or raising any concerns," it said.
Reliance Capital's board also took note of the views of legal experts who independently carried out an in-depth examination of the matter and the issues raised by PwC, as per the company and the independent legal opinion from reputed law firm confirmed that there was no violation.
"The 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," the statement said.
Further, the board observed 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 alleged fraud".
As per the statement, PwC had chosen not to attend the audit committee meeting on June 12, 2019 despite being invited to do so and abruptly resigned at the unearthly hour of 4.32 a.m. on June 11, 2019.
"After resigning and ceasing to be the auditor of the company, PwC filed its letter with MCA later the same day; and PwC did not even share a copy of its letter with the company or even with the Board's independent audit committee, despite repeated requests by the company."
The Board reaffirmed to take all appropriate steps to safeguard the interests of all stakeholders.