HYDERABAD: Price Waterhouse Chartered Accountants LLP (PwCA), the statutory auditors of beleaguered Hyderabad-based infrastructure player GVK Power & Infrastructure Ltd (GVKPIL), have communicated their intention to resign as auditors citing the failure of the company and its management to submit the requisite information to them for preparing the audit of the financial statements for financial year 2019-20 despite repeated attempts.
The proposed resignation of the statutory auditors comes even as the GVK group and its promoters are under the Central Bureau of Investigation (CBI) and Enforcement Directorate scanner in the Rs 705 crore Mumbai international airport scam.
“In view of various matters described in our communication, including the recent events in relation to company’s subsidiary, Mumbai International Airport Limited (MIAL), we have assessed the appropriateness of our continuance as statutory auditors of the company in terms of Standard on Quality Control 1…and accordingly wish to communicate our intention to resign as statutory auditors of the company,” said the PwCA letter dated August 13, 2020.
The proposed letter, which was written by PwCA partner NK Varadarajan to the audit committee of GVKPIL, also states that PWC was conscious of its obligations the SEBI circular issued on October 18, 2019 and would make best efforts to conclude the company’s financial results subject to the cooperation of the company and its management.
“Our resignation as statutory auditors of the company shall accordingly be effective immediately on discharge of our obligations under the Companies Act, 2013,” said the proposed resignation letter by PwCA, which has been submitted by GVKPIL to the Bombay Stock Exchange as part of a regulatory filing.
In the letter, PwCA has said that it gave repeated reminders to the company and its management from July 6 to August 12, 2020, with regard to the ongoing audit of the company’s FY2019-20 financial results but is still awaiting information and explanations that will enable it to conclude its audit.
In the first week of July this year, CBI registered a case against GVK Group chairman GVK Reddy, his son GV Sanjay Reddy, who is the vice-chairman of GVK Group and managing director of MIAL, and other group companies for allegedly siphoning off around Rs 705 crore from MIAL.
Less than a week after that, ED booked a money laundering case against GVK Reddy and his son GV Sanjay Reddy in the same matter.