PwC comes under fire over Gazprom audit
Minority investors in state-owned gas monopoly Gazprom are suing PricewaterhouseCoopers, the company's auditor, for what they claim are "misleading" reports that PwC prepared for Gazprom's management.
Hermitage Capital Management is Russia's leading private-equity fund with more than $650 million under management and one of the biggest foreign investors in Gazprom. Its chairman, Bill Browder, is unhappy with PwC, which he claims has whitewashed relations between the gas giant and private gas trading company Itera.
Browder has brought two lawsuits against PwC and has asked the Russian finance ministry to pull PwC's audit licence. He says he intends to follow up with legal action in the US and will ask the US Securities&Exchange Commission to launch an investigation if he wins in Russia.
This is the first time that Russia's audit laws will be tested and Hermitage has asked for the number of judges at the Moscow Arbitration Court, which is hearing the suit, to be increased from one to three because of the unprecedented nature of the case.