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25 Jun, 2007 12:17

PwC withdraws Yukos audit reports

PricewaterhouseCoopers has withdrawn its Yukos audit reports for 1995 to 2004, as pressure from the Russian authorities mounts on the tax and audit firm. The government had threatened to revoke PwC's license to operate in Russia, for unpaid taxes but in A

The future of PricewaterhouseCoopers in Russia has long been entwined with that of Russian oil company Yukos.

PWC started provided auditing services for Yukos when it was Russia's largest oil company in the 1990s and continued to do so when the Russian government began a campaign against the company, on allegations of tax evasion and fraud.

But the link has now been fully severed according to a PwC press release on Sunday….

“PwC decided to withdraw its audit opinions for Yukos when it became aware of new information which – had it been known at the time – may have affected Yukos' audit reports. PwC now believes information and representations which were provided to PwC by Yukos' former management may not have been accurate,” underscores the audit company.

Although PwC will not disclose what this information is, the background to the move is clear for all to see.

Yukos has been dismantled, with state-controlled oil firm Rosneft now controlling its most valuable former assets.

And the ex-head of Yukos – Mikhail Khodorkovsky – is in prison for tax evasion.

Lawyer Valeriy Gusha says PwC's withdrawal ensures that Yukos' legal battles are far from over.

“Now, both the shareholders of Yukos and Yukos itself may register their claims against PwC, because the main information provided was not true. A rather big wave of legal actions may follow. It may both by and against Yukos,” the lawyer says.

As for PwC it has recently secured its license to operate in Russia for a few more years.

But it's still fighting claims from the Russian authorities that it colluded with Yukos in producing false accounts between 2002 and 2004.