ED imposes Rs 230 crore penalty on PwC for FEMA violations

The Enforcement Directorate’s (ED) has fined global accounting firm PricewaterhouseCoopers (PwC) with a fine of Rs 230.40 crore for violating  Foreign Exchange Management Act (FEMA), officials said on Monday.

 

PwC

The ED’s Special Director (Eastern Region), which is the adjudicating authority, has imposed the fine. It charged the firm guilty of the violation of section 10(6), 6(2), 6(3) and 9(b) of the FEMA, 1999 for receiving investments in the disguise of dubious grants in non-permitted sector without the Reserve Bank of India’s (RBI) approval.

The ED last week had issued a show-cause penalty notice on the firm and others under the FEMA.

It’s alleged the firm was running financial services, including financial forensics, financial risk consultancy, management consultancy, deals and transactions and taxation matters, in which foreign investment is not allowed without the RBI approval.

As per the allegation, the PwC along with others, including PwC chairman Shyamal Mukherjee, Director Satyavati Behera, ex-chairmen Deepak Kapoor and Ramesh Ranjan, former executive director Ambrish Dasgupta and former employee of the company Shivam Dubey, received investments from PwC Services BV by falsely showing them as grants to avoid the FEMA provisions.

The above mentioned accused can appeal the order within 45 days from its issue.

The ED had called the probe against PwC after the Supreme Court issued an order in public interest litigation, filed by an NGO.

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