Latest news with #MSKA&Associates
Time of India
22-05-2025
- Business
- Time of India
Q4 Loss at ₹2.3k Crore: IndusInd Trips on Lapses, Ends in Red
IndusInd Bank said it is probing key management personnel (KMP) for 'wrongful accounting practices' that could amount to fraud, as the Hinduja-promoted lender reported a net loss of ₹2,328 crore in the fourth quarter of FY25, against net profit of ₹2,349 crore a year ago. For FY25, the bank reported a 71% fall in net profit to ₹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 on Wednesday, the bank said investigations into its accounts showed that the top management that exited the company under suspicious circumstances may have committed accounting fraud, misled the board of directors, and hid the truth from auditors to present a rosy picture. The bank said board-commissioned probes 'revealed an involvement of senior bank officials, including former KMPs, in overriding key internal controls.' They also showed 'a concealment from the board and the statutory auditors of the wrongful accounting practices adopted, over such period of time, as indicated in the… investigation/ review reports.' IndusInd said 'there is likely involvement of senior management in the matters' and that it had 'reason to believe that suspected offences involving fraud may have been committed.' 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 Chokshi & Chokshi LLP. The auditors have referred the suspected fraudulent actions of the past management to the government, which may lead to criminal prosecution. Chairman Sunil Mehta said IndusInd 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 for FY25. The approach toward financials has been to start FY26 on a clean slate, without carrying forward any 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. The chairman also said the bank will not wait for the new chief executive to join and act on the lapses, while acknowledging that these were not expected from a bank like IndusInd. He said the matter of likely fraud has been reported 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,' said Mehta. Erstwhile managing director and chief executive Sumant Kathpalia and deputy CEO Arun Khurana, who were designated as KMP for the period under review, resigned late last month. Mehta said IndusInd is in the process of identifying a new chief executive 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 673.8 crore and fee income of Rs 172.6 crore, apart from certain incorrect manual entries posted in the 'other assets' and 'other liabilities' of the previous year, amounting to Rs 595 crore.
Time of India
21-05-2025
- Business
- Time of India
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.
