The auditors of West Bengal-based Saradha Group, which is alleged to have duped thousands of investors of their savings, are now under the scanner of the Institute of Chartered Accountants of India (ICAI), the apex body of chartered accountants (CAs). The ICAI has also initiated inquiry against the auditors and key managerial persons in Reebok India to determine their role in the alleged scam.

Speaking to FE, ICAI president Subodh Kumar Agrawal said the institute has written to Serious Fraud Investigation Office (SFIO), the registrar of companies (RoC) and the local police in West Bengal for details of Saradha Group companies, including documentary evidence to ascertain whether ICAI can initiate actions against the group’s auditors.

“We want to see the documents and papers related with the books of accounts of Saradha Group. We want to make a prima facie opinion that there was any wrongdoing on part of the auditors before we initiate action,” Agrawal said, adding the ICAI knows who the auditors are.

When asked why ICAI remained silent for so long despite the names of Saradha Group being disclosed by the corporate affairs ministry as among the tainted entities involved in illegal chit funds and ponzi schemes, Agrawal said: “We can not simply initiate action against auditors. We need documentary proof, evidence and other information to establish any wrongdoing by our members. That is why we have written to the RoCs, SFIO and other authorities now.”

Scam-hit Saradha Group is under investigations from various central and state government authorities, including SFIO, the income tax department and the Special Investigation Team (SIT) of the Kolkata Police.

The Saradha Group scandal was caused by the collapse of a ponzi scheme causing an estimated loss of R20,000 crore. The Saradha Group scam is under investigation across several states like Assam, Odisha, Sikkim, and Tripura besides West Bengal.

Agrawal said ICAI has been actively pursuing instances where the role of auditors/CAs have been highlighted. “We promptly wrote to the bankers in the Deccan Chronicle case. We have also written to the authorities in the Nokia tax case. Now, we are pursuing Saradha Group, Reebok and others. We have also successfully disposed off almost all of the 83 pending disciplinary cases against members till 2006,” he said. (Business Standard)