INVC NEWS
Mumbai : The National Financial Reporting Authority (NFRA) has imposed a fine of Rs 4.5 crore on a company and two auditors who audited the financial functioning of Reliance Capital in the year 2018-19. NFRA has found all of them guilty of professional misconduct i.e. betrayal of their profession and breach of trust. NFRA has imposed a fine of Rs 3 crore on Pathak HD & Associates.
At the same time, Parimal Kumar Jha will have to pay a fine of Rs 1 crore and Vishal D Shah will have to pay a fine of Rs 50 lakh. Also, Jha will not be able to audit any company for 10 years and Shah for 5 years. When Reliance Capital was audited in the financial year 2018-19, at that time Jha was Engagement Partner (EP) and Shah Engagement Quality Control Review (EQCR ) were partners.
Reliance Capital was audited jointly by Price Waterhouse & Co LLP (PW) and Pathak HD & Associates for FY 2018-19. In its report, PW had informed about suspected fraud of about Rs 12,571 crore by some companies of the group in the matter of loans and investments. NFRA says that a Joint Auditor (PW) reported suspected fraud in the company and resignation. But, other auditors did not take necessary steps as per the Standards of Auditing.
He showed unprofessional attitude, as well as ignored the basic principles of accounting and auditing. At that time, Reliance Capital was owned by Anil Ambani Group. Then after bankruptcy, it was bought by Hinduja Group under the resolution process.
