Russian investigators raided the Moscow office of PricewaterhouseCoopers (PwC) yesterday, stepping up pressure on the "big four" audit firm ahead of a crucial court case over allegations that it signed off on false accounts by Yukos, the bankrupt oil company.
About 20 law-enforcement officials from the prosecutors' office and the interior ministry combed PwC's offices for documents relating to Yukos, and questioned senior managers, including Mike Kubena, head of PwC in Moscow, the company said.
Interior ministry officials also announced that they were beginning a criminal investigation into alleged tax avoidance by PwC in Russia.
The search came as PwC prepared for a court hearing on Monday in a lawsuit filed by Russia's federal tax service alleging that PwC concealed tax evasion by Yukos from 2002 to 2004. PwC denies all the accusations.
The pressure against the audit group is seen as a key element in the continuing state campaign against Yukos as the government prepares to sell off the oil company's remaining assets and fight off multibillion-dollar lawsuits filed by Yukos's former owners in courts in The Hague and Strasbourg.
Prosecutors last month brought new charges against Yukos founder Mikhail Khodorkovsky of laundering more than $23 billion (€17.5 billion) in oil sales, which could keep the Kremlin opponent in jail for a further 10 years.
The raid appeared to be an attempt by Russia to press PwC into taking its side, which could help the government win its legal cases internationally and counter the impression that its campaign against Yukos is political, a former senior Yukos executive and lawyer said.
Much is at stake for PwC. If found in violation of accounting procedures, the audit firm could lose its Russian licence and with it several valuable clients, including major state-controlled companies such as Gazprom, the natural gas giant, Sberbank, the savings bank, Russia's central bank, and Unified Energy System, the electricity monopoly.
PwC said yesterday it did not understand why the raids and new investigation had been launched.
The tax case against the company itself is an extension of an ongoing lawsuit that PwC lost in court last year.
The firm said it had already paid charges for non-payment of taxes worth 243 million Russian roubles (€7.06 million) in full, and was appealing against the ruling.
The tax service last December brought further legal action, claiming PwC had issued two different audits of Yukos in 2002.
One audit said the finances of Yukos complied with Russian law, while a second, internal, report to Yukos management allegedly pointed out irregular financial structures.
PwC has said it rejects the charges.
