The National Financial Regulatory Authority has imposed penalties on 18 branch auditors of the erstwhile Dewan Housing Finance Corporation Ltd (DHFL) following investigations into their professional misconduct.
The penalties involve a fine of Rs 18 lakh cumulatively and debarment ranging from six months to one year, as per the 18 separate orders by NFRA. Of the 18 auditors, 14 have been debarred for a period of one year and the others for six months.
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The orders relate to Aabhas Tiwari, partner of Mangesh V Kekre & Associates, DN Chaturvedi, partner of D N Chaturvedi & Co, Dhiraj Parasmal Jain, Partner at Atul Dhiraj & Co, Harish Sharma, partner of R Shah & Co, Mangesh Vitthal Kekre, partner of Mangesh V Kekre & Associates, Mohammad Ayub, partner of ABPS & Associates, Nilesh Shah, P Poovalingam, partner of J. Singh & Associates, Rabi Kumar Patra, partner of ABPS & Associates, Ramesh Chaturvedi, proprietor of Ramesh Chaturvedi & Co, Ramesh Pipalawa, partner of Shah & Taparia, Rashmikant D Kundalia, partner of RD Kundalia & Associates, Sanjay Soni, partner of Lahoti Navneet & Co, Shrishail Veeranna Mantgol, Partner of Veeranna G. Mantgol & Co, Sunil R Jumani, proprietor at Jumani & Co, M Varnan Karnath, partner of Karnath & Karnath Associates, Vijay Singh Pamecha, partner of Vijay Singh Pamecha & Company and SK Senapati, partner of ABPS & Associates.
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According to the NFRA orders, the auditors were appointed as engagement partners for statutory audit of various branches of DHFL in the fiscal year 2017-18.
Following media reports on the alleged siphoning of public money of around Rs 31,000 crore and the Enforcement Directorate’s reported action in April 2020 on an alleged banking fraud of about Rs 3,700 crore by the promoter and directors of DHFL, NFRA took suo motu notice of the matter and conducted an Audit Quality Review (AQR). “During the review, NFRA also noticed that 33 Engagement Partners (EP) or branch auditors had signed the “Independent Branch Auditors’ Report” for nearly 250 branches,” the orders found. The NFRA orders found various instances of lapses in audit and professional misconduct by the auditors.
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NFRA is a statutory body to monitor the implementation and enforce compliance of the auditing and accounting standards and to oversee the quality of service of the professions associated with ensuring compliance with such standards. NFRA has the powers of a civil court.
Previously, in April this year also, the NFRA through four orders had imposed a ban and monetary penalties of a total of Rs 4 lakh against four partners of an audit firm engaged by DHFL for professional misconduct in 2017-18.
