J&K Bank Auditors Raise Red Flags in FY 2022-23 Accounts
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Statutory auditors of Jammu and Kashmir Bank have issued a qualified opinion on the lender’s accounts for the financial year 2022-23, raising red flags in the employee stock purchase scheme (ESPS). In accounting parlance, a qualified opinion means that financials are fairly represented but with the exception of a certain area.
The J&K Bank’s auditors said its employees availed loans from the bank to purchase the shares, but that was in violation of the Reserve Bank of India’s directions. J&K Bank’s stock issue opened on March 15 and closed on March 21; there was an allotment of seven crore equity shares totalling Rs 274.75 crore at a price of Rs 39.25 a share to 9,834 employees.
The bank’s auditors pointed out, “During the process of issuing of certificate for listing purpose, we came across from the sample data of employees (who have applied for the issue), that the employees availed their existing/freshly enhanced facilities of general-purpose cash credit limit and personal Ioan accounts and transferred amounts from such loan accounts to their saving bank accounts from where the amount for share issue was debited/ (money was given). These transfers from credit facility to saving bank account were made during the period of opening of ESPS or just before that to allotment of shares under ESPS. This use of credit facility is not in line with RBI directions.” (Source - Economic Times - ET Prime)
The J&K Bank’s auditors said its employees availed loans from the bank to purchase the shares, but that was in violation of the Reserve Bank of India’s directions. J&K Bank’s stock issue opened on March 15 and closed on March 21; there was an allotment of seven crore equity shares totalling Rs 274.75 crore at a price of Rs 39.25 a share to 9,834 employees.
The bank’s auditors pointed out, “During the process of issuing of certificate for listing purpose, we came across from the sample data of employees (who have applied for the issue), that the employees availed their existing/freshly enhanced facilities of general-purpose cash credit limit and personal Ioan accounts and transferred amounts from such loan accounts to their saving bank accounts from where the amount for share issue was debited/ (money was given). These transfers from credit facility to saving bank account were made during the period of opening of ESPS or just before that to allotment of shares under ESPS. This use of credit facility is not in line with RBI directions.” (Source - Economic Times - ET Prime)
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