High Court stays Kerala govt decision to ban PwC from state projects

PricewaterhouseCoopers has challenged the ban citing that the Kerala government had isseud the ban without hearing their side
High Court stays Kerala govt decision to ban PwC from state projects

The Kerala High Court has ordered a week-long stay on the Kerala government’s decision to ban PricewaterhouseCoopers for two years. The Pinarayi Vijayan-led government had banned Pricewaterhouse Coopers (PwC) from participating in the Kerala Electronics and IT department projects for two years. The ban follows the appointment of unqualified persons for the Kerala State IT Infrastructure Limited (KSITL)’s Space Park Project came to light. The professional services network has submitted to the High Court that the state government had issued the ban without hearing their arguments on the issue. Accepting the merits of the company’s claims, the HC issued a week-long ban on the government order.

On November 27, the state government had issued an order in this regard. “KSITIL has appointed PwC as the Project Management Unit (PMU) in the Space Park Project and executed an agreement with them. As per the terms of the contract, the entire responsibility to satisfy the credentials and integrity of the resource persons lies upon PwC. However, it is seen that PwC did not perform a comprehensive background check, including educational qualifications, in case of appointing an individual in the PMU of Space Park. This is a serious breach of contractual obligations on the part of PwC,” the order states. Based on this, the state government decided to bar PwC from participating in projects in the Electronics and Information Technology Department for two years from the date of issuance of the order.

The order was executed immediately after the Kerala government decided not to extend the K-Fon contract with PwC. The K-Fon contact was given by M Sivasankar, the former principal secretary to Chief Minister Pinarayi Vijayan.

While investigating links between gold smuggling accused Swapna Suresh and Sivasankar, a two-member committee comprising of Chief Secretary Vishwas Mehta and Additional Chief Secretary Rajesh Kumar Singh had asked the LDF government to blacklist PwC from all IT department projects, and all transactions with PwC must be investigated. The committee found that it was on Sivasankar’s recommendation that Swapna got the job of Operations Manager in the Space Park Project.

According to reports, after an interview, KSITIL MD Jayasankar Prasad appointed Swapna once her reference with Sivasankar was cross-checked. PwC was Swapna’s consultancy firm. KSITL paid PwC Rs 20 lakh for Swapna’s services. Later, it came to light that Swapna had produced fake certificates to get the job. On this development, KSITL decided to seek an investigation against PwC for Swapna’s appointment.

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