Mumbai: reserve Bank of India On Tuesday, it said it has restrained chartered accountancy firm Haribhakti & Co from conducting any audit assignments in regulated entities for a period of two years for non-compliance of regulatory directions.
“This action has been taken due to failure to comply with a specific instruction issued by the audit firm” reserve Bank of India With regard to its statutory audit of a systemically important non-banking financial company,” the Reserve Bank of India said in its statement.
The two-year ban begins on April 1, 2022.
A source familiar with the matter said the action was implemented due to a lapse in the central bank SREI Group company finances that the accounting firm should have disclosed in its audit report. As per the financial statements released by Srei Infrastructure, Haribhakti and Co. Was the statutory auditor for the company between the financial years 2016 and 2020.
RBI said earlier this month that it would initiate bankruptcy proceedings against them. Srei Infrastructure Finance Limited and Srei Equipment Finance Ltd., and replaced the boards of non-banking financial companies over governance concerns and defaults.
However, the RBI said the restriction will not affect audit assignments in regulated entities for the current financial year ending March 31.
This is the first restriction under Section 45MAA of the Reserve Bank of India Act, 1934, which allows the central bank to remove or remove auditors for a maximum period of three years at a time if the audit firm fails to comply with the directions of the RBI. fails.
“This action has been taken due to failure to comply with a specific instruction issued by the audit firm” reserve Bank of India With regard to its statutory audit of a systemically important non-banking financial company,” the Reserve Bank of India said in its statement.
The two-year ban begins on April 1, 2022.
A source familiar with the matter said the action was implemented due to a lapse in the central bank SREI Group company finances that the accounting firm should have disclosed in its audit report. As per the financial statements released by Srei Infrastructure, Haribhakti and Co. Was the statutory auditor for the company between the financial years 2016 and 2020.
RBI said earlier this month that it would initiate bankruptcy proceedings against them. Srei Infrastructure Finance Limited and Srei Equipment Finance Ltd., and replaced the boards of non-banking financial companies over governance concerns and defaults.
However, the RBI said the restriction will not affect audit assignments in regulated entities for the current financial year ending March 31.
This is the first restriction under Section 45MAA of the Reserve Bank of India Act, 1934, which allows the central bank to remove or remove auditors for a maximum period of three years at a time if the audit firm fails to comply with the directions of the RBI. fails.
.