Mumbai: Reserve Bank of India said that on Tuesday it was detrimental to the accounting firm hired by Haribhakti and CO from conducting audit assignments in the entity set for a two-year period due to non-compliance with regulations.
“This action has been taken because of the failure of the audit to comply with certain directions issued by the RBI in connection with the audit of non-banking financial company laws which are important systemically,” said the Indian reserve bank in his statement.
The two-year ban began on April 1, 2022.
A source familiar with the issue said the central bank’s actions were enforced because of deviations on the Finance of the SREI group company which should be disclosed by the accounting company.
According to financial statements issued by SREI infrastructure, Haribhakti and Co.
It was a legal auditor for the company between the 2016 Financial Year and 2020.
The previous RBI said it would begin the bankruptcy process on SREI Infrastructure Finance Ltd, and replaced the non-banking financial company board about the problem and the default governance.
However, RBI said the prohibition would not affect audit assignments in the entity set for the current financial year ended March 31.
This is the first interarment under the 45mA part of the Bank of India’s reserve Act, 1934, which allows the central bank to delete or pair auditors for a maximum period of three years at a time if the audit company fails to comply with the direction of RBI.