CG Power fraud: ICAI asks CBI for case details on ‘signing partners’ of auditors

KR Srivats New Delhi | Updated on July 24, 2021

Nihar Jambusaria, President, ICAI

Seeks from SBI the plaint it filed and forensic audit reports to decide on action against the auditors

Audit regulator ICAI has written to the Central Bureau of Investigation (CBI) and State Bank of India (SBI) seeking information on the signing partners of three statutory auditors between FY’2014-15 and FY’ 2018-19 in the CG Power & Industrial Solutions matter.

The allegation is that the signing partners of these three audit firms — Sharp & Tannan, Chaturvedi & Shah(joint auditor for FY 16 to FY 18), and KK Mankeshwar & Co (joint auditor for FY18 and FY19) — signed off on the audited balance-sheets for these years without highlighting any of the fraudulent transactions in CG Power of over ₹5,000 crore.

“We have today written to the CBI and SBI seeking specific information on the CG Power matter. Based on their response, we will take a decision on whether ICAI will initiate disciplinary proceedings against the signing partners of these audit firms,” Nihar Jambusaria, President, Institute of Chartered Accountants of India, told BusinessLine.

Jambusaria said that the CBI has not shared with the CA Institute any information on the action taken against the three statutory auditors.

The CBI had filed a case against the three audit firms based on a complaint from the State Bank of India, the lead lender to CG Power. The ICAI, in its letter to the CBI, sought details on the case filed by the agency and also a copy of its chargesheet, if any, sources said.

Also, the ICAI has asked SBI to share the complaint it filed with the CBI and the two forensic audit reports (SBI had commissioned two firms) on CG Power, they added. The SBI complaint, it is learnt, identified Milind Phadke (FY15 and 16) and Vinayak Padwal (FY17) of Sharp & Tannan; Parag D Mehta (FY17) of Chaturvedi & Shah; and Ashwin Mankeshwar of KK Mankeshwar & Co (FY18 and FY 19) as the signing partners.

Sharp & Tannan is understood to have had a long association with CG Power as statutory auditor till FY2016-17. it is only in recent years that policy makers have been strict about auditor rotation and brought changes to the company law to implement auditor rotation, say corporate observers.

Published on July 23, 2021

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