ICAI looking into PNB scam

CA regulator seeks details from PNB, CBI, ED and SEBI to ascertain if there were wrongdoings by auditors; sets up high powered group to examine systemic issues The CA regulator, Institute of Chartered Accountants of India (ICAI), on Friday said it has asked Punjab National Bank (PNB) as well as probe agencies including the CBI, Enforcement Directorate (ED) and capital markets regulator SEBI to provide it the requisite details regarding the alleged Rs 11,5000000000 scam to ascertain whether there were professional misconduct/wrongdoings by auditors. In a statement, the ICAI also said it has set up a high powered group in the matter to examine whether there are systemic issues. The CA regulator said it would also suggest remedial measures and improvements in the banking system to prevent such incidents in the future. The matter allegedly involves jeweller Nirav Modi acquiring fraudulent Letters of Undertaking from a PNB branch in Mumbai to secure overseas credit from other Indian lenders. The CBI has since registered a case against Mr. Modi and others on the basis of the complaint filed by the state-owned PNB, while the ED is also conducting raids and investigations in the matter. “The ICAI, in consonance with its role as regulator considering the mammothness and modalities of the irregularity that has been perpetrated on the Public Sector Bank, has suo motu triggered its disciplinary mechanism by writing to the Bank concerned and also other investigating agencies, SEBI, ED and CBI, requesting them to provide requisite details of their investigations in PNB matter,” the ICAI said. The ICAI said it “would be actively pursuing the issue with the concerned agencies and stakeholders so as to examine the matter in detail to suggest improvements.” The ICAI’s Financial Reporting Review Board — which according to the CA regulator’s website reviews “the general purpose financial statements of certain enterprises and auditor’s report thereon relating to which serious accounting irregularities in the general purpose financial statements have been highlighted by the media reports” — is learnt to be carrying out the suo motu review of the PNB, Nirav Modi and Gitanjali Gems matters.