Reliance Capital A heavy fine has been imposed on the company that conducted the audit. The National Financial Reporting Authority (NFRA) has imposed a total fine of Rs 4.5 crore on an audit company and two auditors. The case pertains to alleged lapses in the auditing of the financial position of Reliance Capital in 2018-19. As per the order, a fine of Rs 3 crore has been imposed on Pathak HD & Associates, Rs 1 crore on Parimal Kumar Jha and Rs 50 lakh on Vishal D Shah. Apart from this, Jha and Shah have been banned from doing audit related work for 10 years and five years respectively.
was jointly audited
Jha was the Engagement Partner (EP) and Shah was the Engagement Quality Control Review (EQCR) Partner for the statutory audit of Reliance Capital for FY 2018-19. The company was jointly audited by Price Waterhouse & Co.LLP (PW) and Pathak HD & Associates in 2018-19. NFRA, in its April 12 order, said the auditors did not complete adequate procedures under the Standards on Auditing (SA) despite reporting the suspected fraud and resignation by the other joint auditor (PW).
Expressed concern over IIHL’s bid
Recently, insurance regulator IRDAI had raised some objections on the resolution plan of Hinduja group company IndusInd International Holdings (IIHL) for debt-ridden Reliance Capital. The Insurance Regulatory and Development Authority of India (IRDAI) in a recent letter to Reliance Capital administrator Nageswara Rao Y said IIHL’s resolution plan is not in accordance with insurance norms. The regulator has sought clarification regarding the equity capital that IIHL is ready to invest. Sources said the regulator has expressed reservations about the debt that IIHL plans to raise for the acquisition of Reliance Capital.
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