The Reserve Financial institution of India has barred chartered accounting agency Haribhakti & Co. from taking on any kind of audit assignments for entities regulated by it.
The bar comes into impact from April 1, 2022 and can stay in place for a interval of two years, the RBI stated in a press release on Tuesday. This won’t impression audit assignments taken up by the agency in RBI-regulated entities for the monetary 12 months 2021-22, it stated.
“This motion has been taken on account of the failure on the a part of the audit agency to adjust to a particular path issued by the RBI with respect to its statutory audit of a systemically vital non-banking monetary firm,” the regulator stated in its assertion.
In response to an individual accustomed to the matter, the motion has been taken in reference to audit assignments of Srei Group non-bank lenders. The RBI, final week, outdated the boards of Srei Infrastructure Finance Ltd. and Srei Gear Finance Ltd. and referred the 2 firms for insolvency proceedings.
In response to monetary statements issued by Srei Infrastructure, Haribhakti and Co. have been statutory auditors for the corporate between FY16 and FY20. In response to the annual report for FY21, D. Ok. Chhajer & Co. have been appointed statutory auditors on the annual common assembly in September 2020.
The RBI invoked powers below Part 45MAA of the RBI Act to take this motion. That is the primary time that the regulator has taken such an motion in opposition to an audit agency, the individual quoted above stated.
“The place any auditor fails to adjust to any path given or order made by the (Reserve) Financial institution below part 45MA, the (Reserve) Financial institution, might, if glad, take away or debar the auditor from exercising the duties as auditor of any of the Financial institution regulated entities for a most interval of three years, at a time,” the part states.