The Kolkata bench of National Company Law Tribunal (NCLT) on Friday started hearing submissions made by the counsel appearing on behalf of the promoter and erstwhile director of Srei group for setting aside a forensic audit by KPMG into the company.

The bench comprising of Rajasekhar VK and Balraj Joshi have set February 21 (Monday) as the next date of hearing on the matter.

It is to be noted that lenders to Srei group had appointed KPMG Assurance and Consulting Services LLP as an auditor for the proposed debt restructuring plan.

In a recent application filed by Hemant Kanoria, founder and erstwhile director of Srei, sought setting aside the appointment of KPMG citing the issue of a possible parallel auditing as the company is currently undergoing corporate insolvency resolution process (CIRP). It should be mentioned that the resolution professional for Srei has appointed BDO India LLP as the transaction auditor under the Insolvency and Bankruptcy Code (IBC).

“While an audit being conducted under a statutorily institutionalised process under IBC, there cannot be non-institutionalised, one-sided not independent audit being conducted on the other side and steps being taken on that basis,” Soumendra Nath Mookherjee, the counsel appearing on behalf of erstwhile director said in his submission.

He also questioned whether it would be right to proceed with a forensic audit conducted under the circular of RBI and volition of banks, once CIRP process starts and we have institutionalised audit taking place.

The counsel further argued that any forensic audit of the corporate debtor would be unfair as the applicant and erstwhile directors of the company’s board, which has been superseded by Reserve Bank of India, would not get the opportunity to give any explanation.

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