NFRA fines Auditor Neeraj Bansal For Lapses In Religare Finvest

NFRA Fines Auditor Neeraj Bansal For Lapses In Religare Finvest

Strap – Bars him for five years for failing to report fraud

The National Financial Reporting Authority (NFRA) has fined auditor Neeraj Bansal Rs.5 lakh due to lapses in auditing Religare Finvest Ltd for the Financial Year 2017-18.

The violations include failure to report fraud, assess risks, verify future taxable income, question investments, and obtain evidence.

Bansal, a chartered accountant, is a member of the Institute of Chartered Accountants of India (ICAI). He was the engagement partner for the statutory audit of Religare.

The order came after NFRA investigated him under the Companies Act, 2013 and issued a show cause notice.

The regulator noted that Bansal did not comply with the companies (audit and auditors) rules and failed to report the fraud to the Central government about the corporate loan book (CLB) of Rs.2,036 crore.

NFRA observed that the auditor failed to assess the risk of fraud and management override of controls in the firm. He ignored that the Reserve Bank of India (RBI) had raised serious concerns regarding the CLB portfolio of the company and RFL reporting about the fraud on Strategic Credit Capital Pvt Ltd (SCCPL).

The NFRA order read, "Failure in verifying the certainty of future taxable income against which the deferred tax assets of Rs.495.63 crore were recognized in the books.”

It added, “The EP (Neeraj Bansal) failed to question the business rationale of the investments by Religare of Rs.200 crore in non-convertible debentures of OSPL Infradel Pvt Ltd (OSPL), having a net worth of only Rs.1.23 lakh.”

Bansal also failed to obtain audit evidence on the completion and accuracy of consolidation adjustments and reclassifications of the accounts of the company’s subsidiary Religare Housing Development Finance Corporation (RHDFC).