Why is PriceWaterHouseCoopers interested in the VI? – Hon Fraser
Speaking today August 11, 2014 at the continuation of the Eighth Sitting of the Third Session of the Second House of Assembly during the debate of the Public Accounts Committee (PAC) final report on the cruise pier project Hon Fraser said that PriceWaterHouseCoopers has a bad reputation in its handling of financial matters for corporations.
“The question is why are they interested in the Virgin Islands? It can’t be the fee. This is international money moving…big money,” he said.
“PriceWaterHouseCoopers (PWC)? Not a walk in the park…they are as big as you could get. And they are going to stay that way,” he said.
The Opposition has been consistent over many months in their criticism of their engagement of PWC.
Hon Fraser went on in the House to read some news snippets about PWC around the world where various companies sued PWC over accounting issues. He said that one company MF Global Holdings alleging accounting malpractice sued PWC for $ billion. The alleged actions of PWC helped bring down the brokerage company, said Hon Fraser.
He said that PWC which provided auditing and accounting experts failed to advise the firm to account properly for its European sovereign debt holding, leading it to invest too much.
“This is the company that we used to get what we got, including a $35 million loan from First Caribbean Bank. When you see who PWC really are, even you would hire them to get a loan for your house, because you don’t have to pay it back,” said Hon Fraser.
“Why is PWH interested in the BVI? PWC is the largest of the big four auditing firms, having earned just over $26 billion in revenues for the fiscal year 2009. For 2013 that figure was $32.9 billion in earnings. In real perspective, if you were to look at the size of PWC, [with their earnings] PWC can finance our Government for 103 years with one year’s earnings. So it begs the question, Madam Speaker, why a company of this magnitude is so interested in the Virgin Islands,” he asked.
Hon Fraser pointed out that PWC claimed a ‘success fee’ of $262,500 for getting a $35 million loan. “To the ordinary man in the street that’s a lot of money, but to PWC that can’t even supply toilet tissues in one of their offices for a month,” he said.
“So the question still is – why are they interested in the BVI,” he said. “For the little work that they are here doing, why are they doing this work for us? Who is it that recruited this company? The questions are there. If you don’t want me to ask them that doesn’t mean that they do not exist. I have to ask them because I have a duty to represent them,” he said.
He noted that following accounting scandals involving PWC, the company was careful not to be providing consultancy services and accounting services to the same entity because of concerns over conflict of interest.
Noting that the company settled in the amount of over $200 million with a company that was planning litigation, Hon Fraser said, “That’s what happens…when you’re so big you can roll over anybody, because you can buy your way out. This is what they do.”
“These are hired guns, whatever you want they can give you without fear of reprisal because they can buy their way out,” he said.
He said that PWC has been also accused of helping to hide significant financial failures through an offshore tax scheme.
“Should we as a Government be in bed with PWC that is the question,” he said. “Is it poor judgment on our part to be using this company or is it willfulness? This company can get you anything you want,” he stressed.
“I mean which bank is going to turn us down when we’ve got PWC,” he stated. “My question is judgment on our part to be involved with this company,” said Hon Fraser.
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21 Responses to “Why is PriceWaterHouseCoopers interested in the VI? – Hon Fraser”
This kind of scrutiny should have been given Hugh Darley and Disney affiliates whose project in Jamaica isn't going as planned. Or Disney itself and how they take over territories for their self-interest. We need to do more vetting of companies before throwing good money after bad.