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Wednesday 29 January 2020

PwC slapped with Rs 229 crore+ FEMA violation penalty

PricewaterhouseCoopers received investments from PwC Services BV by falsely showing them as grants so as not to attract FEMA: ED officials

New Delhi: The Enforcement Directorate (ED) has slapped an over Rs 229-crore Foreign Exchange Management Act (FEMA) violation show-cause penalty notice against multi-national accounting firm PricewaterhouseCoopers (PwC), officials said on Friday. They said the notice was issued under the Foreign Exchange Management Act (FEMA) after completion of the probe by the adjudicating authority which is the Special Director (Eastern Region) of the Enforcement Directorate.

The penalty amounts to $ 4,98,42,747, which is equivalent to Rs 2,29,67,21,906, the order said.

Officials said the company, along with other notices, received investments from Ms PricewaterhouseCoopers (PwC) Services BV by “falsely” showing them as grants so as to avoid attracting provisions of FEMA which require the approval of the government or to say the Reserve Bank of India.

“The adjudicating authority during the course of adjudication has held the company guilty of violation of Section 10(6), 6(2), 6(3) and 9(b) of FEMA, 1999, for receiving investments in the guise of purported grants in non permitted sector without the approval of the RBI, ” the order said.

The ED had taken over the probe against the firm on directions of the Supreme Court which asked it to look into the affairs of the company from the point of view of FEMA.

PricewaterhouseCoopers (doing business as PwC) is a multinational professional services network with headquarters in London, United Kingdom. PwC ranks as the second-largest professional services firm in the world and is one of the Big Four auditors, along with Deloitte, EY and KPMG.

PwC is a network of firms in 158 countries, 721 locations, with 250,930 people. As of 2018, 28% of the workforce worked in Asia, 28% in North America and the Caribbean and 30% in Western Europe. The company’s global revenues were $41.3 billion in FY 2018, of which $17.06 billion was generated by its Assurance practice, $10.45 billion by its Tax practice and $13.78 billion by its Advisory practice. PwC provides services to 420 out of 500 Fortune 500 companies.

PwC was formed in 1998 by a merger between Coopers & Lybrand and Price Waterhouse. Both firms had histories dating back to the 19th century. The trading name was shortened to PwC in September 2010 as part of a rebranding effort.

In 2017, PwC was the fifth-largest privately owned company in the US.

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