IndusInd Bank probing key management persons for "wrongful accounting practices"
IndusInd Bank
Wednesday said it is probing key management persons for "wrongful accounting practices" that could amount to fraud, as the Hinduja-promoted lender reported a net loss of Rs 2328 crore in the fourth quarter, against net profit of Rs 2,349 crore in the year-ago period.
For FY25, the bank reported a 71% fall in net profit to Rs 2,575 crore, as it absorbed the entire financial impact of derivatives-related accounting lapses and underreporting of microfinance bad loans, seeking to start FY26 with a clean slate.
In regulatory filings Wednesday, the bank said investigations into its accounts showed that the top management that exited the company in suspicious circumstances may have committed accounting fraud, misled the board of directors, and hid the truth from the auditors to present a rosy picture.
Play Video
Pause
Skip Backward
Skip Forward
Unmute
Current Time
0:00
/
Duration
0:00
Loaded
:
0%
0:00
Stream Type
LIVE
Seek to live, currently behind live
LIVE
Remaining Time
-
0:00
1x
Playback Rate
Chapters
Chapters
Descriptions
descriptions off
, selected
Captions
captions settings
, opens captions settings dialog
captions off
, selected
Audio Track
default
, selected
Picture-in-Picture
Fullscreen
This is a modal window.
Beginning of dialog window. Escape will cancel and close the window.
Text
Color
White
Black
Red
Green
Blue
Yellow
Magenta
Cyan
Opacity
Opaque
Semi-Transparent
Text Background
Color
Black
White
Red
Green
Blue
Yellow
Magenta
Cyan
Opacity
Opaque
Semi-Transparent
Transparent
Caption Area Background
Color
Black
White
Red
Green
Blue
Yellow
Magenta
Cyan
Opacity
Transparent
Semi-Transparent
Opaque
Font Size
50%
75%
100%
125%
150%
175%
200%
300%
400%
Text Edge Style
None
Raised
Depressed
Uniform
Drop shadow
Font Family
Proportional Sans-Serif
Monospace Sans-Serif
Proportional Serif
Monospace Serif
Casual
Script
Small Caps
Reset
restore all settings to the default values
Done
Close Modal Dialog
End of dialog window.
by Taboola
by Taboola
Sponsored Links
Sponsored Links
Promoted Links
Promoted Links
You May Like
Pare a neuropatia: descubra como
NeuroFit
Undo
The bank said board commissioned investigations 'revealed an involvement of senior bank officials, including former Key Management Personnel (KMP), in overriding key internal controls…, and a concealment from the board and the statutory auditors of the wrongful accounting practices adopted, over such period of time, as indicated in the respective investigation/ review reports.'
It said that 'there is likely involvement of senior management in the above matters' and the 'we have reason to believe that suspected offences involving fraud may have been committed.'
Live Events
The observations were part of the auditors' report filed along with the earnings of the bank. The auditors of the bank are MSKA & Associates and Choksi & Choksi LLP.
The auditors have referred the suspected fraudulent actions of the past management to the government, which may lead to criminal prosecution.
'Clean Slate'
Meanwhile, Chairman Sunil Mehta said the bank's balance sheet remains healthy after absorbing all the negative charges, with a capital adequacy ratio of 16.24%, a provision coverage ratio of 70%, and a liquidity coverage ratio at 139% in the first half of this quarter.
'The financial impact of all the above has been fully taken in the audited financial statements of the bank for the financial year 2024-25. The bank's approach toward financials has been to start FY25-26 on a clean slate, without carrying forward any of the past issues,' Mehta told analysts soon after announcing the results.
'The bank has thoroughly reviewed all the lines of accounting and has taken a conservative view in some of the accounting treatments. This has reflected in a few one-offs versus the business-as-usual run rate,' he added.
Mehta also said the bank will not wait for the new CEO to join and act on the lapses, while acknowledging that such lapses were not expected from a bank like IndusInd.
He said the bank has reported the matter of likely fraud to the relevant government agency.
'The board has also taken a very serious view with respect to staff accountability across levels to reinforce the governance and compliance culture and is in the process of taking action for staff accountability,' he said.
Erstwhile MD & CEO, Sumant Kathpalia, and Deputy CEO Arun Khurana, who were designated as KMP for the period under review, resigned late last month. Mehta said that the bank is in the process of identifying a new CEO within the June 30 deadline stipulated by the Reserve Bank of India (RBI).
The board had commissioned investigations regarding forex derivatives transactions of Rs 1,960 crore, incorrect interest income of Rs 673.82 crore and fee income of Rs 172.58 crores, and certain incorrect manual entries posted in the "other assets" and "other liabilities" of previous year amounting to Rs 595 crore.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
17 minutes ago
- Time of India
Flatted factory in Gr Noida to boost MSME sector
Lucknow: In a significant move to boost Uttar Pradesh's MSME sector and strengthen push towards becoming a trillion-dollar economy, the Yogi Adityanath govt is set to construct a state-of-the-art flatted factory in Greater Noida. "The initiative is part of the broader vision to transform the state into a leading industrial hub, with a strong focus on supporting MSMEs alongside heavy industries," a govt spokesperson said. Yamuna Expressway Industrial Development Authority (YEIDA) has drawn up a detailed plan for the flatted factory complex. The factory will be developed in Sector 28 of Greater Noida, Gautam Budh Nagar, with a total investment of Rs 125 crore. Preparatory work, including the master plan and related reports, is currently underway, with construction expected to be completed within 24 months. This project is aimed at accelerating the growth of MSME sector by offering state-of-the-art infrastructure to small businesses within a shared complex. The flatted factory will provide fully equipped units with all essential facilities, enabling production and operations. The proposed complex is expected to play a crucial role in attracting new investments to the region, driving local economic development, and generating employment opportunities, particularly for youth. The project will be built under the engineering, procurement, and construction (EPC) model and is expected to be completed within 24 months.
Time of India
32 minutes ago
- Time of India
If strictly veg, why order from eatery that also serves non-veg: Consumer panel
MUMBAI: Questioning why they chose to order from a restaurant that also offered non-vegetarian options instead of an exclusively vegetarian establishment if they were strictly vegetarian and believed consuming meat would hurt their religious sentiments, a consumer commission has dismissed a complaint filed by two Dadar residents who sought Rs 6 lakh in compensation from a fast food chain that served them chicken momos in Dec 2020. "[That] a prudent person would be able to distinguish between veg and non-veg food before consuming it seems reasonable," the commission said. The complainants, Gargi Joshi and Jitesh Mundhwa, had claimed that they had specifically asked for vegetarian options twice when placing an order for a momo and soft drink combination meal for Rs 120 at Wow Momos Foods Private Ltd's Sion outlet, but the commission said the complainants failed to substantiate this claim, noting that the invoice indicated a non-vegetarian order. It said the photos of the dish provided by the complainants did not clearly show whether it was non-vegetarian. On the complainants' claim that a display board near the eatery did not explicitly state that meat could be part of the combo meal, the commission comprising president Pradeep G Kadu and member Gauri M Kapse pointed out that it did mention "veg or non-veg" at the bottom. It also found no evidence for the claim that Joshi and Mundhwa's plan to perform puja or religious ceremonies was thwarted by the consumption of meat. "...they have [not] disclosed the names of any pujari or pandit who allegedly performed the puja... They have failed to disclose even the nature, name, date and place of the puja or religious ceremonies," it said. The Dadar residents had said after being served the wrong food, they contacted the company's head office in Kolkata and spoke to the director, who connected them to the Mumbai management. An employee representing the Mumbai management apologised to them and offered to meet them to resolve the matter, but no settlement was reached during a meeting, they said. In their complaint filed before the consumer panel in 2021, Joshi and Mundhwa provided copies of the bill, photographs of the display board and legal notices. The company said the complainants suppressed facts and that they themselves had ordered non-vegetarian items, as shown by the invoice. Arguing that they were not "consumers" under Consumer Protection Act, 2019, as they had received a refund, the company said it had clearly displayed vegetarian and non-vegetarian options and has a complaint book and email ID available, which the complainants did not use. It also denied employing the server who the complainants said had taken their order, adding that the person was physically abused by the complainants. The company said it had refunded the complainants' money because they had created "unnecessary nuisance". Despite their behaviour, it said, the complainants were also offered a gift voucher worth Rs 1,200 as a goodwill gesture, but they demanded Rs 3 lakh each.
Time of India
an hour ago
- Time of India
Maharashtra IT department emerges as primary cloud service provider for govt departments
Pune: Maharashtra's Information Technology Corporation Ltd (MahaIT) has become the main cloud service provider for govt departments. Senior state IT officials confirmed that several departments have already began migrating their data to MahaIT's cloud platform, marking a strategic shift in the state's data management approach. Tired of too many ads? go ad free now "It is a win-win situation — departments gain peace of mind regarding data safety and security, while we strengthen our capabilities in cloud services," said an official. The move has come in the aftermath of a major controversy earlier this year when MahaIT filed a criminal complaint against a private cloud vendor and its directors over alleged extortion and threats to delete sensitive govt data. The FIR accused the firm of breaching contract terms and blocking access to services for eight departments after invoicing for undelivered services. The matter escalated to Bombay High Court, which directed affected departments to transfer their data to MahaIT's cloud. Launched under Maharashtra's 2018 public cloud policy — the first of its kind in India — the state mandated all govt departments to store data on cloud platforms, opening a Rs 200 crore opportunity for cloud service providers. However, concerns over security and vendor reliability have since prompted a greater push for in-house cloud solutions. Currently, MahaIT is in discussion with multiple departments to broaden cloud adoption on its platform, aiming to consolidate govt data under a single, secure service provider. Many departments, such as the state registration department, the agriculture department, and many others, have shifted to cloud. "There are several departments that are already using cloud services. We will reach out to all departments and put across our services,'' an IT official added.
