PwC Moscow – Still Breathing, BarelyBy Francine • Jun 24th, 2008 • Category: Pure Content
Wow! A story about an audit firm, the foreign office of an audit firm in the WSJ!
PWC Wins Right to Appeal Ruling on Russian Tax Case
PricewaterhouseCoopers LLC won a reprieve from a Russian appeals court Monday in a closely watched case in which lower courts ruled the auditor was an active participant in tax evasion at now-bankrupt oil giant OAO Yukos.
Overturning a lower-court order issued in January, the Federal Arbitration Court for the Moscow District ruled that PWC’s Russian unit has the right to appeal the ruling against it. Yukos, once Russia’s largest oil company, was slapped with tens of billions of dollars in back-tax claims and largely nationalized in a case that several foreign courts have ruled was a politically motivated attack on its billionaire owner, Mikhail Khodorkovsky. He is serving an eight-year prison term for tax evasion.
PWC was Yukos’s auditor. After facing back-tax claims of its own, as well as other official pressure, the firm last year withdrew its audits of the oil giant, which had endorsed Yukos’s tax strategies.
But PWC’s legal problems persisted, as appeals courts upheld the ruling that it actively aided Yukos’s tax evasion from 2002 to 2004. That judgment could have threatened Pricewaterhouse’s auditing license in Russia, though regulators so far have made no move against the group.
“We are pleased that the decision provides us a further opportunity to defend our position in the appeals court,” a PWC spokeswoman said in an emailed statement, referring to Monday’s ruling. “We have always maintained that the claim has no legal merits.”
The firm also is preparing an appeal to the Supreme Arbitration Court of its own back-tax claims.