MCA probing 42 listed companies for Financial Irregularities as auditors quit

The Ministry of Corporate Affairs (MCA) has asked western regional directors of the Registrar of Companies (RoC) to investigate 42 listed companies whose auditors resigned abruptly by May-end. The probe will focus on finding whether there were any financial irregularities at the firms along with ascertaining the real reason behind the auditors’ resignations.

A source told Moneycontrol, “MCA is not happy with the way auditors resigned from these companies. Auditors said they had taken this step as companies had failed to provide them with certain information. On their part, companies also did not mention why the auditors had quit in their filling and did not address the allegations made by the auditors, which is unacceptable.”

Nonetheless, another senior official at the ministry said, “We have instructed regional directors to probe these companies and provide a logical conclusion as to why these auditors quit suddenly".

The list of 42 companies, which is in possession of Moneycontrol, includes firms like CG Power and Industrial Solutions, Sri Adhikari Brothers Televisions Network, Hexaware Technologies, Vakrangee and Gitanjali Gems.

In response to Moneycontrol’s queries over e-mail, Sri Adhikari Brothers, Hexaware and Vakrangee said that they have not received any such communication from the ministry.

Meanwhile, CG Power did not reply to Moneycontrol’s query regarding the story.

“Auditors have been working with some of these company accounts for many years now and their sudden resignation is a cause of concern. The auditors will also be under scrutiny as they have not particularly informed the MCA about the reason behind their resignation,” the source added.

A source told Moneycontrol, “Deloitte Haskins & Sells India has not had any problem with the company [Manpasand Beverages] for the last eight years. In the RoC filing as well the auditor did not provide any adverse reason for resigning.”

The MCA wants the regional directors to first probe 11 companies who have not yet appointed auditors. The ministry wants to know why auditors are not ready to associate with these companies. #casansaar (Source - MCA, MoneyControl)