Two Anil Ambani group companies’ auditors banned by NFRA over irregularities

Two of Anil Ambani’s Reliance Group are under the scanner of National Financial Reporting Authority (NFRA) for irregularities in the accounts. 

According to a report in Times of India, NFRA has banned the auditors of Reliance Home Finance and Reliance Commercial Finance, as well as the firms, and has also levied a penalty for irregularities in their accounts for 2018-19 period. Both the companies had appointed new auditors after Price Waterhouse auditors resigned suspecting fraud. 

Reliance Home Finance auditor Dhiraj & Dheerak has been fined Rs 1 crore, and the chartered accountants and partners at the firm Piyush Patni and Pawan Kumar Gupta, have also been penalised. They have been barred from taking on audit assignments for 3-5 years. 

"The omissions and commissions of the auditor had rendered the audit report unreliable. The audit firm issued a qualified report while it was required to issue a disclaimer or adverse opinion, had the audit been concluded as per standards of accounting," NFRA said, as per the report.

Reliance Commercial Finance auditor Shridhar & Associates has been fined Rs 2 crore penalty, and engagement partner Ajay Vastani has been barred for five years, along with a Rs 50 lakh fine. Price Waterhouse had resigned as auditor suspecting fraud. Vastani was held guilty for accepting the engagement without communicating with PW – a deviation from the firm’s policy.

NFRA said that the auditor accepted the company’s legal interpretation that there was no fraud, and based on that dismissed any suspicions of fraud even while the matter was pending with the ministry of corporate affairs. 

The agency said that Vastani gave a clean chit and filed to check the end use of loans, indications of siphoning of funds and other aspects. 

This comes after Reliance Capital, another group company, had faced similar action last month.