NFRA debars auditor of Bartronics India for 10 years

Aug 4, 2023

The order came after NFRA received information from the Ministry of Corporate Affairs regarding irregularities observed by the Financial Reporting Review Board (FRRB) of Indian Institute of Chartered Accountants of India (ICAI).

India’s audit regulator, National Financial Reporting Authority (NFRA) on Thursday debarred the statutory auditor of Bartronics India for 10 years, on account of professional misconduct for financial years between 2013 and 2015. The regulator also slapped a fine of Rs 5 lakh. The order will be effective after 30 days from its issuance from August 3, 2023.

The order came after NFRA received information from the Ministry of Corporate Affairs regarding irregularities observed by the Financial Reporting Review Board (FRRB) of Indian Institute of Chartered Accountants of India (ICAI).

The listed company was being investigated for the audit in FY 13-15, into the role of the statutory auditors, T Raghavendra. The company had substantial public holding with 87.46% of shares held with the public. The role of the auditors in such cases involving substantial interest becomes more important.

Raghavendra’s debarment for ten years would mean that he would not be allowed to practice as an auditor, internal auditor or from undertaking audit of financial statements or internal audit of the functions and activities of any company or body corporate.

Baltronics India went under the corporate insolvency resolution process (CIRP) initiated against the company on an order by NCLT on December 2, 2019.

According to the order, Bartronics India Raghavendra was its statutory auditor for five financial years from FY 2012-13 to FY 2017-18. As per information available in Annual Report for FY 2013-15, Raghavendra was paid Rs 12.2 lakh (which included audit fees of Rs 8 lakh and limited reviews of Rs 4 lakh and Rs 20,000 for other services).

NFRA slapped the maximum debarment of ten years on Raghavendra as per Section 132 of Companies Act. In this year NFRA debarred three auditors for ten years including Raghavendra -- AS Sundaresha in April, 12; and Lavitha Shetty in April 25.

As per NFRA website, out of 22 auditors debarred this year, the regulator has debarred 15 auditors and two firms only in the month of April, as of August 4, 2023.

​[The Economic Times]