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Reliance Group-AUDITOR RESIGNS, INFORMS MCA OF IRREGULARITIES PwC Red Flags Holes in RCap, Home Fin BooksReliance Group says it does not agree with PwC’s reasons for quitting

June 13, 2019 05:18 AM

COURTESY ET JUNE 13

AUDITOR RESIGNS, INFORMS MCA OF IRREGULARITIES
PwC Red Flags Holes in RCap, Home Fin Books
Alleges diversion of funds, transactions with other group companies; Reliance Group says it does not agree with PwC’s reasons for quitting
Sachin Dave & Vinod Mahanta

Mumbai

: Price Waterhouse & Co (PwC) has informed the ministry of corporate affairs about certain alleged irregularities in the books of accounts of Reliance Capital (RCap) and Reliance Home Finance. The irregularities, which involved alleged diversion of funds and transactions between the two firms and other group companies, came to light while it was auditing the books of the two companies for the first quarter ending June 2019, two persons close to the development said. PwC quit as auditor and informed the ministry of corporate affairs (MCA) about the reasons behind its departure, these persons said. This was conveyed to MCA on June 11 by Vivek Prasad, partner at PwC.


People close to the development said the auditor had raised the issues with the company a few months back and discussions had been taking place between the two. Specifically, there appears to have been an issue with certain related-party transactions and the RCap management was willing to give a management letter. “The auditors were insistent that they would like better visibility on certain transactions between group companies,” one of the persons said.

A management representation letter is a written assurance given by the management to auditors when disputes arise over certain issues.

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