KPMG bags RCL audit mandate

Reliance Communications, the flagship company of Reliance ADA Group, has finalised global auditing major KPMG as its statutory auditors for a one-year period and is seeking shareholders' approval. Global majors such as PricewaterhouseCoopers (PwC) and Ernst & Young were also in the race for the account.

KPMG will be auditing via its Indian arm BSR & Co, while Indian auditing firm Chaturvedi & Shah has also been roped in to jointly audit the books of the group. The Anil Ambani group firm is in the process of communicating the same to its 2 million shareholders and on receipt of approvals, KPMG will be appointed as auditors.

The audit parade for the company was among the most fiercely-pitched accounts among the global auditing firms and was conducted in three phases, sources close to development said.

When contacted, a Reliance Communications spokesperson confirmed the development. However, he did not disclose the financial details of the contract.

However, he said, "Consequent to the reorganisation of the telecommunications business, the operations of the company have increased manifold. The decision has been taken keeping in mind the benefit to our two million shareholders".

In the first phase, the company had shortlisted top 10 auditors and conducted an internal exercise to shortlist four of them.

The company had shortlisted KPMG, E&Y, PWC and Chaturvedi & Shah. Under the second phase, discussions were held with top brass of the four auditing majors, and in the last round the audit parade meeting was chaired by Reliance Communications chairman Anil Ambani.

According to sources, KPMG was finalised as the top executive of Reliance Communications had found it to be best suited with processes of the company and in line with the corporate governance standards advocated by Anil Ambani. KPMG will look at enhancements of corporate governance and bring in global best practices into the company.