PwC quits as statutory auditor of Reliance Capital, Reliance Home Finance

Price Waterhouse & Co Chartered Accountants LLP (PwC) on Tuesday resigned as one of the statutory auditors of Reliance Capital and Reliance Home Finance.

In a notice to the stock exchanges, Reliance Capital said Price Waterhouse has ceased to be the statutory auditor citing 'certain observations' during its ongoing assessment of FY18-19, which, if not resolved, could be significant to the financial statements.

Reliance Capital, in the exchange filing, said M/s Pathak HD & Associates will continue as the sole statutory auditor until the conclusion of the AGM for the year ended March 31, 2021.

PwC stated that, in a letter dated April 24, 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 firm, as per PwC.

On Tuesday, chairman of the group, Anil Ambani, said Reliance Group is committed to meet all payment obligations in a timely manner and has already serviced debt worth Rs 35,000 crore in the last 14 months.

Despite the challenging environment, the group has repaid principle due worth Rs 24,800 crore and interest payments of Rs 10,600 crore from April 1, 2018, till May 31, 2019, he added.

Ambani said that lenders from all categories—banks, mutual funds, NBFCs and insurance companies—have not provided any loans to the group in the last 14 months.

According to PWC, "these actions by the company (Reliance Capital) have prevented it from performing its duties as statutory auditors and exercising independent judgment in making a report to the members of the company, and 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."

The two companies, however, denied the reasons stated by the auditor and claimed they provided all the details, 'especially including certification and confirmations of the transactions in question on multiple occasions by PWC themselves', as per the exchange filings by Reliance Capital and Reliance Home Finance.

The Audit Committee and Board will meet on Wednesday to appoint a new statutory auditor.