Judicial review sought on audit firm’s registration
KUALA LUMPUR (Nov 24, 2010): A 42-year-old financial consultant has challenged the Securities Commission to a judicial review at the High Court, questioning the registration of PricewaterhouseCoopers (PwC) with the Audit Oversight Board (AOB).
Ramesh Chelliah, who has almost a decade-old suit pending against PwC for breach of contract, claimed PwC’s registration (with the AOB) was questionable as it was dated April 1, 2010 – the same day the AOB was established.
The AOB was set up as a watchdog on all audit firms following public complaints.
It is now a must for audit firms to be registered with the AOB. Registration with the board indicates these firms have passed tests of accountability and good conduct.
In affidavits submitted on Nov 19, Ramesh said one of PwC’s auditors was registered the same day while the others were registered later.
"The registration of the firm is a physical and/or legal impossibility," he said in his application.
Ramesh submitted that provisions under the Securities Commission (SC) (Amendment) Act 2010 which was enforced on April 1, 2010, requires an auditor be registered with the AOB.
He said Question 18 of the AOB’s frequently asked questions (FAQ) states: "This assessment would require the AOB to do background checks with the relevant regulatory authorities."
"From the information available on SC’s website, in order to be registered as an auditor of a public interest entity with the AOB, an applicant must make an application in the prescribed form as determined by the AOB," he said.
He said information from the website also makes it clear that once the application form is received, the AOB will take up to two weeks to do the necessary assessment of information that has been submitted.
Ramesh’s affidavit also mentions a meeting with the AOB executive chairman and another with two SC officers regarding his queries and complaints that PwC had not disclosed information about the pending suit between the auditing firm and himself.
At the second meeting, Ramesh said he was told by one of the officers that PwC had disclosed their pending suit in its application.
Ramesh contends: "I was given to understand the application forms were given out before April 1, 2010 which was an illegal act by itself."
In March 2001, Ramesh filed a RM307 million suit against PwC, its managing partner Chin Kwai Fatt and PricewaterhouseCoopers Consulting Sdn Bhd for damages for breach of contract.
Ramesh was known in the late 1990s and early 2000s for forecasting market movements using astrology.
Chin, when contacted, said PwC would defend itself in the suit.