With respect to audits of various branches of housing finance company DHFL, 18 auditors have been penalised and debarred by the National Financial Reporting Authority (NFRA).
The probe by the regulator found that there were violations by these auditors in their roles as Engagement Partner (EP) in the audit of DHFL branches.
According to 18 separate orders passed by the regulator, penalties totalling ₹18 lakh have been imposed on the auditors for their professional misconduct.
The 18 auditors have been debarred for a period of six months to 1 year from “being appointed as an auditor or internal auditor or from undertaking any audit in respect of financial statements or internal audit of the functions and activities of any company or body corporate”.
Out of the 18 auditors, 4 have been debarred for 6 months and the remaining 14 for 1 year.
According to the orders, the NFRA suo-motu initiated an audit quality review (AQR) following media reports of alleged siphoning of public money of around ₹31,000 crore and the Enforcement Directorate’s reported action in April 2020 on an alleged banking fraud of about ₹3,700 crore by the promoter/ directors of DHFL.
The review was to probe into the role of the Statutory Auditors of DHFL for FY 2017-18, the year in which the alleged fraud was primarily stated to have occurred, as per the NFRA orders.
During the AQR, the NFRA also found that 33 EPs or branch auditors had signed the independent branch auditors report for nearly 250 branches of DHFL but none of the appointments of these EPs were approved at the company’s annual general meeting (AGM).
On September 20, the Securities and Exchange Board of India (Sebi) had imposed penalties totalling ₹6 crore on 15 entities, including Kapil Wadhawan and Dheeraj Wadhawan, for flouting disclosure norms in the case of DHFL.
Wadhawans are the former promoters of DHFL.
The fines need to be paid jointly and severally within 45 days, the Sebi said in an order.
“Exciting news! Mint is now on WhatsApp Channels 🚀 Subscribe today by clicking the link and stay updated with the latest financial insights!” Click here!
Download The Mint News App to get Daily Market Updates & Live Business News.
Updated: 01 Oct 2023, 07:04 PM IST