PNB Scam: Auditors get Notices from ICAI

PNB Scam - ICAI - Taxscan

The statutory auditors of the Punjab National Bank ( PNB ) got the notice from the chartered accountants’ apex body, the Institute of Chartered Accountants of India (ICAI) in connection with Rs 13,000 crore PNB Scam involving Nirav Modi. The eight statutory auditors of the bank are members of ICAI and are governed by the apex body.

The ICAI has already set up a high-level panel solely for investigating the scam. ICAI has made a list of the statutory auditors of the Brady House branch during 2011-12 to 2016-17 and asked them to appear before its Board of Discipline.

“ICAI has issued notices to statutory auditors of the Brady House branch under the Chartered Account Act, 1949, to appear before Board of Discipline and offer an explanation,” ICAI member S B Zaware told PTI.

This is a primary investigation and the board wants to ascertain whether the auditors were at fault.

“At this point, we cannot say that statutory auditors are guilty. After the appear before the Board and answer questions, is when we will be able to determine their role in the fraud if any,” Zaware added.

In February, this year, the second largest public sector bank PNB had deauditors tected fraudulent transactions at the Brady House branch. The biggest ever banking fraud of more than Rs 13,000 crore was allegedly committed by billionaire diamantaire Nirav Modi and his uncle Mehul Choksi in connivance with some PNB officials. The fraud is being investigated by multiple agencies, including CBI, SFIO and ED.

The high-level panel of the ICAI based on available information found out all possible lapses on part of the lender.

Reports said that lapses in corporate governance and concurrent audit work as well as failure to take sufficient precautionary measures are among the factors flagged by the high-level panel.