ICAI Disciplinary Committee passes Orders against 5 Affiliates of Price Waterhouse

The Institute of Chartered Accountants of India (ICAI) has issued disciplinary orders against five Price Waterhouse affiliates, two other organizations, and two individuals for professional misconduct.

In the judgments issued this month, the ICAI’s disciplinary committee instructed that the businesses in question immediately cease existing partnerships with international entities, as this violates the terms of the Chartered Accountants Act of 1949.

The action was initiated against five PwC affiliates: Price Waterhouse & Co LLP, New Delhi; Price Water House, Kolkata; Price Waterhouse & Co, Chennai; Price Waterhouse & Co Chartered Accountants LLP; and Price Water House, Bangalore LLP. Others include Dalal & Shah Chartered Accountants LLP and two chartered accountants, Dinesh Yashavant Supekar and Neeraj Kumar Gupta.

In similarly worded judgments dated May 8, the disciplinary committee stated that there was evident sharing of personnel resources, infrastructure, brand name, and contact information, implying that PwC was effectively controlling the respondent firms and that this constituted “professional misconduct” under the Act.

According to the orders, the committee believes that the entities entered into numerous agreements, including the Accession Agreement, Name License Agreement, and Firm Services Agreement, all of which contain language that obviously violate the Act.

We are disturbed to learn that the ICAI has made the aforementioned rulings public, which is contrary to the legal proceedings before the Hon’ble Delhi High Court, which was held in the presence of the ICAI Disciplinary Committee counsel.

“We have therefore asked the ICAI to immediately take down the orders from their website,” Price Waterhouse and Affiliates stated in a statement.

It further stated that these difficulties are not specific to us, but rather are industry-wide concerns that have nothing to do with its audit procedures or delivery quality.

The committee has decided that Gupta’s name be removed from the register of members for three years in six cases involving Price Water House, Kolkata; Price Waterhouse & Co., Chennai; Price Waterhouse & Co. Chartered Accountants LLP; and Price Water House, Bangalore LLP. Others include Dalal & Shah Chartered Accountants LLP and Dalal & Shah LLP.

The removal time will run concurrently in all six cases. In addition, he has received a fine of Rs.5 lakh in each of the six cases.

Supekar’s name will be removed from the register for three years in the Price Waterhouse & Co LLP, New Delhi case, and he will also face a Rs.5 lakh punishment.

Furthermore, the Name License Agreement signed between PwC Business Trust (an entity formed under the laws of the United States and the owner of the brand ‘PricewaterhouseCoopers’) contains conditions that allow the respondent business to use the PwC trademark.

“The respondent firm/ respondent in their submissions have failed to explain as to how they were able to keep their independence when the domain that was being used belonged to the third party i.e. multinational entity,” the ruling stated.

It also stated that the respondent business, Pricewaterhouse, utilized the domain name ‘@pwc.com’ to capitalise on the multinational entity’s goodwill, and that such acts constituted professional misconduct under the Act.

For Official Order Download PDF Given Below: