PwC declines role as Petropavlovsk auditor

Big Four accountancy firm PwC has declined its appointment as auditors of Russian gold mining company Petropavlovsk over concerns of its governance.

On 28 July 2020, Petropavlovsk announced that PwC was not able to accept its proposed appointment as the company’s auditors and awaited the results of the General Meeting to reassess its position.

However, in a newly released statement Petropavlovsk revealed it has since received a letter from PwC confirming that it does not intend to accept its proposed appointment.

Petropavlovsk added that PwC has not performed any work for the company since its proposed appointment as auditor earlier this year.

The company also said that PwC has declined to enter into any engagement with the board regarding its reasons for resignation.

However, in its letter of resignation, PwC has cited the reasons for its resignation as: “The recent significant changes in the composition of the board of directors, namely the removal of the majority of both independent and executive directors, and our concerns over the governance environment and the lack of clarity as to the future direction of the Petropavlovsk group.”

Petropavlovsk said: “Since its appointment at the requisitioned general Meeting on 10 August 2020, the board has continued to address the question of board composition, including through the announcement earlier today of the appointment of Mr. Malay Mukherjee as a new Independent non-executive director.

“The board is in the process of engaging an external search consultancy to assist it in making further appointments of independent non-executive directors and remains committed to ensuring it has the necessary strength and breadth, with a transparent governance structure that will command the trust and support of all stakeholders.”

The board of Petropavlovsk said it has now commenced work on identifying a new auditor and a tender process is underway and that a further announcement will be made in due course.