BSR & Co resigns as auditor of two Reliance group companies
The auditors had raised questions around corporate deposits and related party transactions in Reliance Infrastructure in the June quarter results.
Earlier in June, Price Waterhouse and Co (PwC) had resigned as statutory auditor of Reliance Capital and Reliance Home Finance.
The auditors had raised questions around corporate deposits and related party transactions in Reliance Infrastructure in the June quarter results. The auditors had also questioned Reliance Power on certain inter-corporate deposits.
Reliance Infrastructure told the stock exchanges on Friday that the reasons for auditor resignation are the same as the ones cited in “Basis of Disclaimer” in their audit report dated June 14, 2019 for the financial year 2018-19. “They have carried out their annual continuance process” and based on that assessment, the auditors expressed their inability to continue as the statutory auditors of the company, Reliance Infra told the stock exchanges.
Reliance Power said that the reason for BSR resignation is in terms “Basis for Qualified Opinion” in their audit report dated June 08, 2019.
BSR and Co resigned as the auditor but Pathak HD & Associates will continue to be the sole auditor of both the companies.
In a June 17 interview to ET, Punit Garg, executive director and chief executive officer, had dismissed the auditors’ concerns over its business as “irrational” after the company reported its biggest loss ever and said the company is confident of turning debt-free in 2020.
“Auditors are behaving very differently now and we are surprised at their irrational behaviour. It is an overhang of what has happened in the IL&FS case and the questions being asked to auditors today,” Garg said.
Auditors had raised red flags on advances given to related parties to the tune of Rs 7,092 crore and had questioned whether this could be recovered. The auditors also raised questions around corporate guarantees worth Rs 1,775 cr.