NEW DELHI: Shares of Reliance Capital and Reliance Home Finance plummeted up to 7 per cent in Thursdays trade after auditor Price Waterhouse - Co (PwC) informed the ministry of corporate affairs about certain alleged irregularities in the books of accounts of the two AGAG group firms.
Shares of Reliance Capital fell 5.37 per cent to hit a low of Rs 82.80 on BSE.
Reliance Home Finance stock fell 6.74 per cent to a low of Rs 15.90.
Sources told ET that the irregularities involved alleged diversion of funds and transactions between the two firms and other group companies.
The matter came to light while PwC was auditing the books of the two companies for the first quarter ending June 2019, two persons close to the development said.Reliance Capital, however quashed such claims.
The company said on Thursday the observations of PwC about its fiscal accounts were completely baseless and unjustified, according to a Reuters report.PwC has quit as the auditor and informed the ministry of corporate affairs (MCA) about the reasons behind its departure, these persons said.
This was conveyed to MCA on June 11 by Vivek Prasad, partner at PwC.
People close to the development said the auditor had raised the issues with the company a few months back and discussions had been taking place between the two.
Specifically, there appears to have been an issue with certain related-party transactions and the RCap management was willing to give a management letter.