18 July 2019 at 10:17 BST

Confusion over big four Indian law change

Report says big four accounting firms may soon be able to practice law in India after all.

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Despite the Bar Council of Delhi stating only just two months ago that Deloitte, EY, KPMG and PwC should “refrain from engaging” in law practice, the big four may soon be allowed to do so, according to a report from The Asian Lawyer.

Cancelled “Last minute”

The report says a scheduled hearing in India regarding the Big Four accounting firms’ practice of law has been cancelled amid negotiations with regulators and the government that could lead to the auditors gaining permission to practice law in India. In May, the Indian operations of Deloitte, EY, KPMG and PricewaterhouseCoopers all received letters from the Bar Council of Delhi alleging the auditors are illegally practicing law in the country and informing them they are barred from doing so until further notice. All four said they had not been practicing law in India. A hearing was set for July 12 at the Delhi Bar Council but it was cancelled “at the last minute,” said Lalit Bhasin, the New Delhi-based president of the Society of Indian Law Firms, a professional association representing the interests of law firms in India. A 2015 petition from Mr Bhasin led to the directive barring the big four from practicing law in India and the scheduling of the July hearing. Bhasin said no reason was given for cancelling the hearing. “[The] status quo remains,” he said. KC Mittal, the chairman of the Delhi Bar Council, said the hearing will be rescheduled, though no date has been set.

Violation

In his petition, Mr  Bhasin alleged that the Big Four engage in the practice of law in violation of the Indian Advocates Act. All four auditors offer legal advice, mainly in relation to tax, compliance and regulatory matters, he said. It is also well known in the Indian legal community that EY and KPMG have exclusive alliances with Indian law firms PDS Legal and Advaita Legal, respectively. Surya Prakash Khatri, a member of the Council and a former chairman, said the Council is still in talks with the Indian government regarding whether the four accounting firms should be able to practice law in India. However, according to Vishnu Sharma, the Delhi Bar Council’s honorary secretary who sent the May letters to the Big Four barring them from practicing law, the Indian government intends to give the accounting firms permission to offer legal services in India, despite objections from the Bar Council of India. Foreign law firms are barred from practicing local law in India and similar restrictions are also intended to apply to the Big Four.

 
   
 
 
 

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