Posted on

PwC loses out


Shawn Cumberbatch

PwC loses out

Social Share

A leading accounting firm based here has lost a valued Caribbean client to a competitor, signalling fallout from a regional restructuring exercise involving Barbados.
Earlier this year PricewaterhouseCoopers officials, including territory senior partner Marcus Hatch who is based in Barbados, announced a
reorganisation of the business in the region, with some PwC operations opting to partner with international adversary Grant Thornton.
However, in the wake of this move which included job losses in Barbados and other islands, BARBADOS BUSINESS AUTHORITY confirmed that Dominica Electricity Services Limited (DOMLEC), now owned by Light & Power Holdings Limited (LPH),  dumped PwC as it auditors in favour of rival Ernst  & Young. The decision was made at a special meeting of DOMLEC’s shareholders last month.
The additional twist was that DOMLEC said it was switching mainly because LPH’s Canadian owner Emera Inc. was audited by E&Y.  
DOMLEC’s books were audited by PwC’s offices in St Lucia but since the firm’s Caribbean restructuring the Barbados office is the only member of that firm’s Eastern Caribbean operation.
A series of documents showed that on May 19, 2013, DOMLEC received correspondence from PwC’s St Lucia office indicating that “they were in preliminary discussions with the PwC Eastern Caribbean, of which they were partners, concerning their separation from the grouping to move to Grant Thornton – another international firm”.
The notification said PwC’s Eastern Caribbean operations would continue to operate in Barbados, Antigua and St Kitts following an “amicable” separation from others in the group.
This was followed by two pieces of correspondence dated May 22 and June 25, the second confirming PwC would no longer have a St Lucia presence.
DOMLEC’s acting general manager Marvelin Etienne and director Grayson Stedman, said in a September 18, 2013 report on the matter the company had no disagreement with PwC nor a problem with its work, but the restructuring “made it necessary for the company to review its options for auditor and decide on what would serve the best interest of the company”.
“Ernst & Young is currently the auditor for the Emera group group of companies. With E&Y as auditor, Emera would be able to ensure the same audit process for the entire group of companies and instruct them on the areas to be focused on in order to meet Emera’s deadlines,” they said.
“This would streamline the group’s year-end audit exercise. If another firm was appointed as DOMLEC’s auditor, E&Y would have to perform an independent review of the working papers of that auditor in January after the end of the financial year. The accounts department would be tasked with yet another set of schedules and deadlines to comply with. This would be time-consuming and could lead to delays in the presentation of the final accounts. In these circumstances it would be in the best interest of the company to appoint E&Y as auditors,” the officials explained.
DOMLEC had notified PwC of its decision to part company in an August 15, 2013 letter from company secretary Ellise Darwton to PWC’s offices in Barbados.
“The company has no disagreement with PwC and recognizes that over the past years PwC has provided creditable service to the company. However, this change at PwC has made it necessary for the company to review its options for auditor and decide on what would serve the best interest of the company,” Darwton wrote.
In reply nine days later, Hatch acknowledged the imminent loss of a major client but appeared hopeful of a future reunion.
“. . . Please note that the PricewaterhouseCoopers East Caribbean Firm has recently joined with PwC firms in the Bahamas, Bermuda, BVI, the Cayman Islands, Jamaica, Trinidad and the Turks & Caicos Islands to establish a highly integrated pan-Caribbean professional network which will provide a larger and stronger platform for us to deliver quality professional services to clients throughout the region, including the islands in the Eastern Caribbean,” his correspondence to DOMLEC stated.
“At your convenience, we would be pleased to have the opportunity to discuss with you and your colleagues how we might be able to support you in the future.”
One official familiar with the situation told BARBADOS BUSINESS AUTHORITY PwC’s loss of other clients should not be ruled out in these circumstances, adding that it was far from business as usual in the accounting profession.

Leave a Comment

Your email address will not be published. Required fields are marked *


Maximum 1000 characters remaining in your comment.

LAST NEWS