The National Financial Reporting Authority (NFRA) is investigating two of Anil Ambani's Reliance Group for discrepancies in the accounting.
As per a Times of India article, the NFRA has imposed a penalty for discrepancies in the accounts of Reliance Home Finance and Reliance Commercial Finance for the 2018-19 period, and has also barred the auditors of these organizations. Following the resignation of Price Waterhouse auditors who suspected wrongdoing, both corporations recruited new auditors.
Dhiraj & Dheerak, the auditor for Reliance Home Finance, was fined Rs 1 crore in addition to chartered accountants Piyush Patni and Pawan Kumar Gupta, who were partners in the business, being penalized. For three to five years, they are not allowed to take on audit jobs.
"The audit report was no longer trustworthy due to the auditor's errors and omissions. According to the study, "NFRA stated that the audit was completed in accordance with accounting standards, but the audit firm issued a qualified report while it was required to issue a disclaimer or adverse opinion."
Engagement partner Ajay Vastani faces a five-year ban and a punishment of Rs 50 lakh, while Reliance Commercial Finance auditor Shridhar & Associates faces a penalty of Rs 2 million. Price Waterhouse, an auditor, resigned due to suspicions of fraud. Vastani was found guilty of breaking the firm's policy by taking the engagement without informing PW.
According to NFRA, the auditor disregarded any fraud allegations even while the issue was still under investigation by the ministry of corporate affairs because he or she accepted the company's legal interpretation that there was no fraud.
According to the agency, Vastani provided a clean sheet and filed to investigate loan purposes, signs of money laundering, and other matters. This comes after similar action was taken against another group firm, Reliance Capital, last month.
