/ Audit

NFRA punish 10 Lakh Penalty & Ban for 10 YR on MACEL Auditor

NFRA punish.

NFRA punished Ten Lakh Penalty on MACEL’s Auditor & Debar for Ten Years

  • National Financial Reporting Authority’s investigations inter-alia revealed that the MACEL’s statutory Auditor for the Financial Year 2019-2020 failed to meet the conditions of the SA in a No of important elements & demonstrated a substantial lack of competence.
  • According to the MACEL Financial Statement, money had been transferred from MACEL to the personal accounts of VGS, his relatives, and companies that he and/or his family members controlled, with outstanding balances of Rs 3,401.66 crores as at 31-03-2020.
  • Reviewing MACEL’s financial statements revealed that, put aside from CDGL, it had no business dealings with any of CDEL’s other six subsidiaries. MACEL was also used as a conduit to defraudably transfer money from CDEL’s subsidiaries to VGS’s personal accounts, the accounts of his family members, and the entities he and/or they controlled as loans and advances that were never paid back to MACEL/CDEL.

depicted

MACEL’s Auditor Debar for Ten Years

  • CA Ms. Shetty argued that it was only after learning about Mr. Siddhardha’s passing in July 2019 and the contents of the letter he left behind that she became aware of any potential financial wrongdoing. She says that as a consequence, she had written a disclaimer of opinion indicating that MACEL’s advances were not recoverable.
  • The National Financial Reporting Authority’s has determined that CA Lavitha Shetty is guilty of professional misconduct based on an investigation and proceedings U/s 132 (4) of the Companies Act, and after giving her an opportunity to present her case, it imposes the following monetary penalties and sanctions via Order that will take effect 30 days after its issuance:
  • Imposition of a fine of Rs. 10 lakhs; & a ten-year ban on appointment as an auditor or internal auditor, or on doing any audit associated with financial statements or an internal audit of the operations and operations of a company or another legal entity.
  • The first 5 of the 10 years of the debarment would run simultaneously with the period of debarment ordered in the case of CA Lavitha Shetty by National Financial Reporting Authority’s order dated April 13, 2023.

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