26 July 2017

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Ex-CFO accuses PwCPL of cooking books, evading tax and flouting laws

Ex-CFO accuses PwCPL of cooking books, evading tax and flouting laws
A former chief financial officer of the Indian arm of global consultant-auditor PwC has filed a defamation suit accusing his erstwhile employer of cooking books, evading tax, wilfully breaking several laws and then intimidating, cheating and tarnishing his name when he refused to help cover-up the white-collar crimes.

Sarvesh Mathur, who was CFO of PricewaterhouseCoopers Private Ltd (PwCPL) between 2008 and 2011, has alleged in his complaint to the Chief Judicial Magistrate’s court in Gurugram, Haryana, that the company falsified its accounts on several occasions, destroyed evidence and lied to government officials. In one instance in 2010, the complaint says, a PwCPL senior official helped adjust Rs 5 crore “outside the system’’.

In the same year, the company booked fictitious expenses of Rs 15 crore to evade tax. On another occasion, another top official and two other executives separately backdated invoices worth Rs 93 crore by an accounting year to show the receipts in 2010 instead of the actual 2011, it says.

Mathur has alleged that he earned the ire of his superiors for raising several issues of falsification of accounts and legal violations and insisting that corrective action be taken. He said he was “initially overruled, intimidated, humiliated, hurt financially etc., for raising his voice against the wrong doings and was gradually sidelined’’. He was eventually told that the management wanted him to resign even though he was not given any reason.

Mathur quit in September 2011 and was asked not to attend office during his notice period up to December 31, 2011. On February 27 the next year, a “termination of service’’ letter was written to Mathur which said during the notice period an internal forensic investigation found he had sent information, documents and data belonging to the company to his personal e-mail IDs. This was a serious violation of the terms and conditions of his employment and the company’s code of conduct, the letter said

The petition in court says PwCPL filed a complaint with the commissioner of police, Gurugram, on March 2 to harass and intimidate him. It was finally withdrawn after he signed an undertaking that he will not retain, share or divulge any information or data of PwCPL entities.

He was made to delete all the evidence, including emails he had sent to the firm’s global leaders, from his mailboxes. The company assured him that they would supply him with all the documents and data if he ever needed to defend himself before any authority.

The company, however, refused to part with any information in 2013 when Mathur received a notice from income tax authorities in connection with an enquiry for tax evasion against PwCPL. Instead, Mathur received a letter from the firm’s lawyers, Karanjawala and Company. The letter stated that PwCPL will not give the documents as it looked like Mathur himself had triggered the investigation through a complaint.

Few days back former chief justice of the Delhi High Court AP Shah writing to the government, including the prime minister and finance minister, listing several instances of violations by auditor PwC (the audit firm is separate from PwCPL) and its partner firms. Justice Shah, writing on behalf of Citizens Whistle Blowers Forum said, “…violations by PwC member firms in India perhaps represents only the tip of the ice-berg and if left un-addressed will pose serious threats to public interest and national security.’’ He questioned PwC’s integrity and competence to render audit and advisory services to clients, including the government.

PWC spokesperson told ET that the case filed by an ex-employee Sarvesh Mathur is also an attempt in that direction to mire PwC and its officials on tenuous grounds in litigations.

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Big scam in the making? Ex-CFO accuses PwC of cooking books, evading tax and flouting laws

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Wednesday, July 26, 2017

Tags – PWC Tax False Accounts