First Leasing auditors resign after red flag on accounts, company to go for forensic audit

M/s Sarathy and Balu has resigned as the statutory auditor of the troubled First Leasing Company of India Ltd, days after red-flagging the accounts of the joint venture between Farouk Irani and Spic Group's AC Muthiah. 

The company, disclosing this in a late Thursday evening announcement to the stock exchanges, said it would request former CBI director RK Raghavan to conduct a forensic audit for its financial operations and examine if there has been a diversion of funds. 

First Leasing was barred from running any business by the RBI last month, which had earlier inspected its books. 

Last week, M/s Sarthy and Balu had stated that certain audit reports and certificates issued by it regarding the previous year's financial statements as also the first quarter of this fiscal should no longer be relied upon. 

The announcement to the stock exchanges also mentioned the appointment of Sundaram & Srinivasan as the new statutory auditor, subject to shareholders approval. (Economic Times)