PWC's observations are completely baseless and unjustified: Reliance Capital

Reliance Capital’s continuing auditor has been mandated by the Audit Committee to submit its independent report on PWC’s observations within 15 days.

Jun 13, 2019 07:06 IST India Infoline News Service

Reliance Capital
Reliance Capital Ltd said on Thursday in the press note that the observations of PricewaterhouseCoopers (PwC) about its fiscal accounts were "completely baseless and unjustified".

Reliance Capital’s continuing auditor has been mandated by the Audit Committee to submit its independent report on PWC’s observations within 15 days. There is no question of ‘diversion’; zero loans and/or liquidity have been provided by any lender in the PWC audit period. Reliance Capital is by law required to fund only group entities, being a Core Investment Company (CIC), the company said in the filing.

All resources have been utilised purely to support group debt servicing of Rs35,000cr in the past 14 months.

In a letter to Reliance Capital, PwC said it felt compelled to withdraw from the audit of the company's fiscal year 2018/19 accounts after not receiving "satisfactory response" to its queries on certain observations in its assessment, Reliance Capital said in a statement on Wednesday.

The following is Reliance Capital’s statement on the matter which was intimated to the stock exchanges on June 11, 2019,” "The Company does not agree with the reasons given by PWC for the resignation. The Company has duly responded to the various queries and letters of PWC and has also duly and validly convened a meeting of the Audit Committee on June 12, 2019, to further respond to the letter dated May 14, 2019, from PWC. The Company expected PWC to have participated in the meeting of the Audit Committee and not resigned on the eve thereof. The Company has also duly furnished all requisite and satisfactory details as required by PWC, especially including certification and confirmations of the transactions in question on multiple occasions by PWC themselves. As regards legal proceedings, the Company had clearly stated that the same would be initiated only if so legally advised, that too if required to protect the interests of all stakeholders, and it is hard to see how PWC has taken exception to this approach.”

Stock view:
Reliance Capital Ltd is currently trading at Rs83.85, down by Rs3.65 or 4.17% from its previous closing of Rs87.50 on the BSE. The scrip opened at Rs85.50 and has touched a high and low of Rs86.60 and Rs82 respectively.

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