Bank of Baroda norms for selecting Auditing firms challenged
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Assailing the decision of the Bank of Baroda, which has fixed Rs. 150-crore turnover as the minimum eligibility for auditing firms to participate in the tender for its assignments, a Chartered Accountant has approached the Madras High Court seeking to restrain officials from going ahead with the decision.
The petitioner, Venkata Siva Kumar, alleged that the decision was arbitrary, capricious and irrational, made with a mala fide intention to eliminate all the medium and small Indian audit firms and pave way for an indirect entry of multi-national audit firms into this public sector bank and latter extend it to other public sector banks, seriously jeopardising the economic interest of India.
When the plea came up for hearing, Justice R. Subbiah ordered the notice to the Executive Officer of the Bank returnable by April 29.
According to the petitioner, it is a usual process wherein the bank calls for empanelment of Chartered Accounting Firms as per the guidelines the Chief Vigilance Commissioner. The best among them, after due diligence, are selected and allotted the assignments to the operations of the bank. “The audit firms once appointed will be carrying out the audit for three years with one-year cooling period. The conditions of the assignment are very rigid, needing 100 per cent examination of transactions on a concurrent basis and unit visits. Reports will be submitted by the 10th of every month,” he said.
On October 2015 a new Chief Executive Officer was appointed to the bank, who had two decades of working experience with a multi-national bank, which was audited by MNC audit firms, he added.
Mr. Venkata Siva Kumar alleged that the new CEO immediately took a decision to summarily terminate all the concurrent auditors doing the job throughout India and abroad without giving any reasons and the letter was posted to the CA firms March 30.
A new tender was floated on April 1, 2016 in which the eligibility criteria for the participants have been fixed as a minimum turnover of Rs 150 crore.
The petitioner alleged that the proposed tendering process exponentially increases the cost of operation without any corresponding benefit, seriously affecting the interest of the bank and the deposit holders, shareholders and innocent public, which is against the economic interest of our nation and sought to quash the decision. He pleaded the court direct an independent investigating agency to probe irregularities, conspiracy and criminal breach of trust, if any by the officials.
BoB has fixed Rs. 150-cr. turnover for auditing firms to take part in tender. #casansaar (The Hindu)
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