IndusInd Bank Ropes In Grant Thornton For Forensic Review Of Accounting Lapses: Report
Grant Thornton will conduct extensive forensic review to assess any evidence that indicates fraud in transactions, the report said.
IndusInd Bank Ltd. has appointed Grant Thornton for a forensic review of accounting lapses detected earlier this month, and ascertain whether any fraud or internal misstatements occurred, Reuters reported citing people in the know.
On Thursday, the bank had announced appointment of an independent professional firm to investigate discrepancies in its derivative portfolio.
In an exchange filing, the lender said that this independent firm will conduct a comprehensive investigation to identify the root cause of the recently disclosed accounting discrepancies. This firm will assess the correctness and impact of the accounting treatment of the derivative contracts with regard to the prevailing accounting standards.
The firm will also provide guidance, identify any lapses and establish accountability in relation to the above-mentioned discrepancies.
The Reuters report stated that Grant Thornton is the independent agency in question, and it will conduct extensive forensic review to assess any evidence that indicates fraud in transactions. The report also mentioned that Grant Thornton would hold assign accountability for the lapses, and review the accounting treatment of all derivative contracts.
On March 10, IndusInd Bank had discovered certain discrepancies in its derivatives portfolio. The bank had estimated a financial impact, which is the equivalent of 2.35% of the bank's net worth as of Dec. 31. This amounts to Rs 1,500–2,000 crore.
Since then, the bank has faced considerable critcism and questions regarding the so-called discrepancies.
NDTV Profit had previously reported that even Reserve Bank of India had taken note of the situation and concucted checks across the banking system to ensure that other lenders are not facing similar issues. Sources had told NDTV Profit then that while the regulator is seeking clarifications from lenders, it looks like this issue was local to IndusInd Bank.
Sources had also told NDTV Profit that the issue facing IndusInd Bank was not one involving the derivatives portfolio, but poor accounting at the bank.
While addressing the press this week, IndusInd Bank promoter Ashok P Hinduja had said that the bank's board would take further calls on what action needs to be taken. At the time, Hinduja had said that this would depend on what the PwC report would say.
With a fresh independent audit, the process will likely take even longer. On March 7, RBI gave only a one year term extension to the bank's MD & CEO Sumant Kathpalia, even though the board sought three years.
