Mumbai: Leading global auditors Pricewaterhouse Coopers has been slapped Rs 230 crore penalty for violating provisions of the Foreign Exchange Management Act, by an adjudicating authority of the Enforcement Directorate.
Separate penalties have also been slapped on the office bearers of the affiliated companies of the auditing firm, including past and present chairmen and directors, ED sources revealed.
The ED had taken up the probe on the direction of the Supreme Court which was hearing a PIL filed by the Centre for Public Interest Litigation, an NGO.
The PIL, filed in 2013, reportedly alleged serious fraud and irregularities in the operation of the firm pertaining to, among others, violation of FEMA regulations and standing orders of the Reserve Bank of India (RBI and evasion of Income Tax (IT).
The ED claimed to have received specific inputs that the company had received huge foreign investment from abroad in the guise of grants, even though the gamut of activities of the company prohibits investment from automatic route which can only be received by taking prior approval of the government or the RBI.
Sources said during the probe, it was revealed that the company received USD 4,98,42,747 (Rs 2,29,67,21906) as purported grants from Pricewaterhouse BV.
The said grants had been utilised for various business purposes, including acquisition of other Indian companies and paying non-compete fee, sources revealed.
Following the registration of a complaint by the Investigating Officer, the adjudicating authority (a special director rank official) had served show-cause (penalty) notices to the firm and certain officials, earlier last week.