Rs 11,400 Crore PnB Scam To Be Investigated By PwC, A Firm Found Guilty In Satyam Computer Scam
[Update: PNB has denied reports that it has roped in audit firm PricewaterhouseCoopers (PwC) to investigate the alleged fraud by Modi and gather evidence against him and his associates. The media report is “totally incorrect”, it said.]
Punjab National Bank (PNB) appointed Price Waterhouse Coopers (PwC) to audit the Rs 11,400 crore scam allegedly committed by Mehul Choksi and Nirav Modi and their string of companies, reported Economic Times.
What does PwC’s appointment mean?
In a 15-point ‘scope of work’ which was drafted on February 17 and finalised on February 21, Punjab National Bank asked PwC to understand how the mechanism of procuring Letters of Understanding (LoU) was misused by Nirav Modi. They also asked them to track the money and the end product of the money. They will also be looking at PnB’s loss due to the entire scam.
The auditor will also seek to trace the assets of Modi and others involved that were not disclosed in company balance sheets and could be seized for recovery of dues, reports The Economic Times. Accounts of seven financial years, starting from 2011 will be under scrutiny.
They will also have to conduct a detailed investigation of the accounts of Nirav Modi’s five companies namely, Firestar Diamonds, Firestar International, Solar Export, Stellar Diamonds and Diamond R Us.
They will be looking at concentrated transactions that were done in bulk. They will also be auditing stocks and inventories of all these companies. All the evidence gathered by PwC would be provided to the Central Bureau of Investigation (CBI) to help them frame criminal charges against Nirav Modi and Mehul Choksi.
PNB is looking for evidence that can nail Modi as a willful defaulter, according to a banker who is part of the consortium of lenders that is owed close to Rs 2,500 crore by the five Modi group entities listed above, as reported by The Economic Times.
PwC was found guilty of Satyam Computer Scam
PNB had invited five firms, including KPMG, EY, BDO and Deloitte, to pitch for an investigation that will be multi-jurisdictional in nature. Deloitte recused itself as it’s a statutory auditor of Firestar International. Apparently, PwC quoted the least, that was almost one-tenth of what was quoted by KPMG.
PNB appoints PWC to audit it in wake of Nimo scam!PWC has been convicted in the Satyam Fraud&has been involved in multiple cases of fraud&money laundering. It is operating illegally in India. Even today SC has ordered inquiry into it's FERA/FEMA violationshttps://t.co/5QMFpLGEwP
— Prashant Bhushan (@pbhushan1) February 23, 2018
In January 2018, Securities and Exchange Board of India (Sebi) banned all the firms in the Price Waterhouse network (PW firms) from auditing listed companies for two years as they were found guilty in the nine-year-old Rs 7,136 crore Satyam Computer Services Ltd scam.