NCLT rejects Hemant Kanwaria’s application against forensic audit by KPMG

The Calcutta bench of the National Company Law Tribunal (NCLT) on Tuesday dismissed an application filed by Mr. Hemant Kanoria, the founder of KPMG, challenging the forensic audit, which was done by the lenders Sree Infrastructure Finance (SIFL) and SIFLE. SEFL). The bench also declared the accounts of SEFL and SIFL as ‘fraudulent’ and dismissed a contempt petition filed by Kanoria against Punjab and Sindhu Bank for violating the tribunal’s interim order by disclosing them to the stock exchange.

Commenting on the NCLT order, Kanoria Foundation spokesperson Dhruv Valla said, “We are evaluating the order and will be finalizing our next steps soon. All options, including filing in the High Court, are open for consideration. ”

Proponents of her case have been working to make the actual transcript of this statement available online. Proponents of her case have been working to make the actual transcript of this statement available online. Against SIFL and SEFL.

Significantly, the bankruptcy proceedings against SIFL and SEFL, two NBFCs, started in October last year, after the bankruptcy petitions filed by the Reserve Bank of India were approved by the Calcutta Bench of NCLT.

In their submission, Kanoria’s attorneys requested that the audit process be set aside in light of the CIRP’s introduction and that lenders be restrained from publishing any audit reports in the central repository of large credit information. The RBI-appointed administrator, Rajneesh Sharma, has appointed BDO India LLP as a transaction auditor, citing a problem of parallel audit under the bankruptcy process.

Regarding the declaration of the accounts of Punjab and Sindh Bank Srei Equipment Finance and Srei Infrastructure Finance as ‘fraudulent’ and reported to the stock exchange, Kanoria’s advisers said that the interim order passed by the lender NCLT was “intentional and intentional”. On February 7th. The Calcutta bench of the NCLT, in its order dated February 7, directed the banks not to publish the reports of the two NBFC accounts of KPMG, they said.

Notably, lenders hired KPMG for a forensic audit in April 2021, when a loan restitution was being considered.

The lawyer, representing the lenders, argued that the work of Punjab and Sindhu Bank was not contemptible. The order said lenders could not publish the KPMG report, but that did not prevent them from taking any further action.

Earlier, the Delhi High Court had barred Punjab and Sindh Bank from declaring the bank accounts of Srei companies as fraudulent after Kanoria sought legal leave. In an order dated 22nd April, the High Court said that till the next date, the bank would refrain from taking any further action or adverse action on behalf of the applicant on the basis of the order declaring the bank account of the applicant as fraudulent. The matter has been scheduled for hearing on August 23.

Private sector lender Karnataka Bank told stock exchanges on May 10 that it had reported to the RBI about “fraud” in credit facilities extended before Srei Equipment Finance.

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