PwC is set to be sued for £14 million by the Administrators for Providence Investment Fund over the alleged “negligence, breach of duty and breach of contract as its auditors.”
The investors who lost approximately £37 million in a Guernsey “Ponzi Scheme” have initiated legal action against the big four accountancy company in an attempt to recover some of their losses.
The investors were promised an up to 14 percent return on their investments by the fund, which collapsed way back in 2016.
The lawyers who are representing the fund alleged that PwC was negligent and was in breach of its duties and contract, resulting in the accumulation of an additional £14,012,730 of money from the investors of the fund.
Mathew Newman, a lawyer who is representing the administrators of Providence, stated: “If we do recover £14m then some of that will find its way back to investors – absolutely.”
The papers that were filed by Newman at Guernsey’s Ordinary Court claim that PwC presented a “clean” assessment of the finances of Providence Investment Funds PCC Ltd (PIF) fbetween the period of October 2012 until the end of 2014, however, while it was being audited, Antonio Buzaneli, the chief executive of the company, and others utilised it as a “fraudulent Ponzi scheme.”
PIF was a Guernsey-regulated firm that claimed to make investments in Brazilian companies.
According to the papers, at one stage, 97 percent of the money of the investors were not able to make it to Brazil, with the majority going to Providence Global Limited, a Guernsey company, instead.
Earlier this year, Buzaneli, one of the shareholders of PIF, pleaded guilty to conspiracy to commit mail fraud in a plea deal in the United States of America.
As a response to the claim of the administrators for £14 million, PwC stated: “We are disappointed that this action has been brought.”
It added: “We believe the claim is misconceived and will vigorously defend our position.”
PwC said that it would “vigorously defend” the action at a Guernsey court.