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Informist, Wednesday, Jun. 18, 2025

--ICAI president: Need at least 6 mos to complete IndusInd Bk, Gensol audits 

--CONTEXT: ICAI President Nanda briefing media ahead of GCC Summit 2025 

NEW DELHI – The Financial Reporting Review Board of the Indian Institute of Chartered Accountants has started the review of the financial statements of IndusInd Bank and the crisis-hit Gensol Engineering Ltd., ICAI President Charanjot Singh Nanda said Wednesday. The reviews, which began in June and May, respectively, will take at least six months to complete, Nanda said. 

The board, a wing of ICAI that works to bring improvements in financial reporting practices, is looking into the two cases and based on their findings, the cases will be referred to the disciplinary committee, Nanda said. The panel will primarily look into the financial results and accounts of the companies for the years 2023-24 (Apr-Mar) and FY25, he added. 

IndusInd Bank is currently going through a tumultuous phase with a forensic audit underway. In March, the bank had reported a hit of INR 20 billion to its net worth due to discrepancies in derivatives accounting. After that, auditors have detected more accounting irregularities and the bank is in the process of appointing a new leadership team, including a new chief executive officer.

After an independent audit, the bank said the accounting hit from these trades had been estimated at INR 19.79 billion. The Securities and Exchange Board of India is investigating fraud and insider trading by the bank's former managing director and chief executive officer Sumant Kathpalia and four other officials. In its interim order, the capital markets regulator has banned the five officials from trading in the stock market. SEBI suspects that the people involved in the case were aware of the discrepancies in the derivatives portfolio as early as December 2023.

Gensol, on the other hand, came to the forefront after SEBI in April started probing the company and its promoters for diverting loans taken from Power Finance Corp. Ltd. and Indian Renewable Energy Development Agency Ltd. The regulator also issued an interim order against Gensol Engineering and its promoter directors, Anmol Singh Jaggi and Puneet Singh Jaggi, barring them from any securities market-related activity and from holding the post of director or any key managerial position in the company till further orders.

Once ICAI's disciplinary committee starts probing into auditory lapses and if there is material evidence, the panel will take action against the auditors, Nanda said. "For chartered accounts, a disciplinary letter from ICAI can mean the end of the career," Nanda said. The ICAI is a statutory body established under the Chartered Accountants Act, 1949, and functions under the administrative control of the Ministry of Corporate Affairs.

The apex chartered accountants body is also looking into the issue of the edutech company Byju's, which has been struggling with financial crises after the COVID-19 pandemic. Nanda said the disciplinary committee, including government representatives, will be formed by the end of Thursday to look into Byju's case. Once the panel is done with the investigation, appropriate action will be taken, Nanda said.   End

Reported by Priyasmita Dutta and Rajesh Gajra

Edited by Saji George Titus

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