Deloitte to sue Jagan company

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posted on 13 years ago — updated on 1 second ago

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HYDERABAD: Is Deloitte Touche Tohmatsu India Pvt Ltd contemplating legal action against Jagati Publications Private Limited owned ..

HYDERABAD: Is Deloitte Touche Tohmatsu India Pvt Ltd contemplating legal action against Jagati Publications Private Limited owned by Kadapa MP YS Jagan Mohan Reddy for breach of contract?
Jagati Publications (JPPL) engaged Deloitte to do its valuation, and one of the clauses in the agreement was that the valuation report would be used only for internal audit purposes. But JPPL allegedly used the valuation report to lure investors and raise loans. Interstingly, the same valuation report was presented to the Income Tax department and CBI which are investigating different aspects of the source of investments in JPPL.Sources disclosed to Express that as per the agreement between JPPL and Deloitte, it was mutually agreed that the valuation report was meant only for the internal purposes and not for anything else. Representatives of both firms signed on the agreement. Deloitte and another Chennaibased consulting firm, Jagadeesan and Company were engaged by JPPL to do the valuation. Sources said JPPL used the report to raise huge loans from banks and attract investors who, based on the valuation report, invested crores of rupees. Surprisingly, JPPL showed the same valuation report to Income Tax authorities and CBI in their probe of Jagan's tax returns and alleged illegal assets. "They used the valuation report whereever it suited their interest,'' sources said.

PN Sudershan, senior director of Deloitte, who was grilled by CBI and whose statement was recorded before a magistrate, reportedly told the agency that JPPL's finance director and auditor Vijay Sai Reddy had told the company that the valuation report was for an internal audit but was later made public.

However, what has surprised CBI officials is that Sudershan, who had during his questioning by CBI maintained that he was threatened into the overvaluing action, toned down the language when his statament was recorded.

It is reliably learnt that Deloitte, which is trying to wriggle out of the mess, is contemplating legal action against JPPL for breach of contract.

When contacted, a spokesperson for Deloitte said it was not proper for them to comment on pending investigations. He said the firm's assignments have been performed with the required level of professional standards.