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. Last Updated: 07/27/2016

Tax Service Widens Its PwC Case

The Federal Tax Service on Friday expanded its case against PricewaterhouseCoopers as it called for the auditor and prosecutors to produce documents that it said pointed to PwC advising Yukos on avoiding taxes.

The tax service's lawsuit against PwC accuses the international auditing firm of colluding with the now-bankrupt oil company by signing off on false audit reports, the Financial Times reported.

PwC and the Prosecutor General's Office were subpoenaed during a hearing at Moscow's Ninth Arbitration Appeal Court on Friday, with members of the service's fifth tax inspectorate demanding that a list of all the company's 146,000 employees worldwide and a rundown of the firm's international units be handed over by Oct. 25, Interfax reported.

Judges granted a tax service request that PwC provide information about what it called the firm's help to Yukos on registering firms abroad, creating trust agreements and "option" schemes to control foreign firms and the "siphoning of assets out of Russia via oil trading firms," the newspaper reported.

PwC's lawyers protested that the demands had nothing to do with the current appeal hearing, but to no avail, the newspaper said.

Friday's hearing was held to hear PwC's appeal against a ruling earlier this year that found that PricewaterhouseCoopers Audit, PwC's Russia branch, had colluded to sign "false" audits from 2002 to 2004.

Yekaterina Shapochka, marketing director for PwC, on Sunday said she could not comment on the court's ruling. The company had not yet received the subpoena, she said.

PwC is the biggest auditor in the country, employing more than 1,500 people and auditing such firms as Gazprom, Alfa Group and the Central Bank.

This finding "puts additional pressure on PwC Russia," said Vadim Vinogradov, the head of the Russian Legal Academy, Kommersant reported Saturday.