LUANDA – The audit work of the consulting firm, PricewaterhouseCoopers (PwC) faces renewed scrutiny after leaked documents showed that the firm works for Isabel dos Santos 46, Africa’s richest woman, who is battling allegations that she obtained her wealth through corruption and nepotism.
A trove of more than 700,000 documents obtained by the International Consortium of Investigative Journalists, shows how PwC — facilitated Ms. dos Santos’ efforts to profit from her country’s wealth while lending their legitimacy.
PwC in all these anomalies acted as her accountant, consultant, and tax adviser, working with at least 20 companies controlled by her or her husband yet there were obvious red flags as Angolan state money went unaccounted for, according to money-laundering experts and forensic accountants who reviewed the newly obtained documents.
The new leaks show the pattern repeating itself in Angola, where invoices point to tens of millions of dollars going to the PwC.
In an interview with the BBC, Ms. dos Santos denied any wrongdoing and called the inquiry “political persecution.” “My companies are funded privately, we work with commercial banks, our holdings are private holdings,” she said.
PwC, based in London, said it was investigating its dealings with Ms. dos Santos and would stop working with her family.
Bob Moritz, whose firm advised companies belonging to Dos Santos and her husband across multiple jurisdictions, told the Guardian he was “shocked and disappointed” by recent disclosures about the British-headquartered accounting firm’s work for the daughter of Angola’s former president.
New details, in an investigation report, revealed a “serious crisis” and conflicts of interest arising from the range of other activities also conducted” by the consulting firm while working with Ms. Dos Santos.
Quoting Maritez, the Guardian also reported that a PwC investigation would examine whether any individuals at the partnership should lose leadership positions, have their bonuses docked or lose their jobs.
“We’ll look at the individual behaviors, as to whether they come out of leadership roles or have compensation implications, or maybe even [come] out of jobs,” Moritz said, in an interview with the Guardian.
He said the firm will have to swing the axe on top officials to regain confidence after the firm has been cited a series of shoddy and controversial works including a recent ‘serious’ audit market review.
PwC was in June 2019 fined £6.5m over ‘lack of competence’ in the audit. On that incident, the Financial Reporting Council (FRC), which regulates auditors fined PwC over its audit of the cloud computing firm Redcentric.
The FRC said some of the breaches were of a “fundamental nature, evidencing a serious lack of competence in conducting the audit work”.
Now, the documents suggest PwC, one of the big four global accountancy firms, acted as auditor, consultant and tax adviser to companies controlled by Dos Santos and her husband in Switzerland, Malta, the Netherlands and Angola. According to the New York Times, another ICIJ partner, PwC worked with 20 of their companies.
Details show that most of the companies involved in the dodgy deals were overseen by accountants working for Price Waterhouse Coopers (PWC.
Whereas PWC has terminated its relationship with the billionaire and her family, the leaked documents show according to BBC News that it made millions providing auditing, consultancy and tax advice to her companies.
PWC says it is holding an inquiry into the “very serious and concerning allegations.
Moritz said that from a reputational perspective, the Dos Santos story was the worst thing to have happened to PwC under his chairmanship, but he believed it was an exception and not the norm.
Speaking to BBC News’s Panaroma, Tom Keatinge, director of the Centre for Financial Crime and Security Studies, told Panorama that PWC had given legitimacy to Ms. Dos Santos and her companies.
“PWC, if not facilitating the corruption, are providing a veneer of respectability that makes what’s happening acceptable or more acceptable than it might otherwise be.
“So if I was at PWC I’d be conducting a pretty thorough audit of what decisions were made, and in hindsight actually: ‘Did we make the wrong decision to accept this business and should we have reported what we had been presented with?'”