PwC says search may be illegal

as tax bill rises to $480,000

Combined Reports

Bloomberg, Moscow Times

MOSCOW — PricewaterhouseCoopers on Monday said investigators might have broken the law when they seized documents during a search of the firm's Moscow offices.

Russia Interior Ministry officials searched PwC Audit's offices Friday for documents related to the firm's tax payments for 2002 and confiscated papers unrelated to that criminal case, the company said on its web site Monday.

"PwC strongly objects to the seizure of such information and has engaged legal counsel to ensure that applicable laws pertaining to the release of seized documents are respected and that all documents unrelated to the cases in question are promptly returned to PwC," the company said.

Irina Dudukina, an Interior Ministry spokeswoman, declined to comment on the criminal case into PwC tax payments, citing the ongoing investigation.

Also Monday, a separate lawsuit brought by the Federal Tax Service against the company over its audit of Yukos was postponed at the Moscow Arbitration Court until March 20.

Tax officials accuse PwC of concealing tax evasion by Yukos in its 2002-2004 audit. In December, the tax service demanded $145,000 from PwC, the amount that Yukos paid for the audit. Since then, the tax demand has increased to $480,000, Interfax said.

Friday's search of PwC's offices by Interior Ministry officials coincided with a search conducted by the Prosecutor General's Office for documents related to the Yukos audit.

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