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PMC’s suspended MD says auditors did ‘superficial’ job

‘Due to time constraints, auditors checked only incremental advances’
The suspended managing director of Punjab and Maharashtra Cooperative (PMC) Bank, Joy Thomas, has blamed the auditors for the mess at the bank, accusing them of only “superficially auditing” the books of the now crippled lender due to “time constraints.” In a five-page letter to the Reserve Bank of India (RBI) dated September 21 after a board member blew the lid on the fraud at PMC, which is among the top ten urban cooperative banks, Mr. Thomas has confessed to the role of the top management, including a few board members, in hiding the actual NPA numbers and also the actual exposure to the bankrupt HDIL, which is stated to be around Rs. 6,500 crore or over 73% of its total loan book of Rs. 8,880 crore. While Mr. Thomas has not named any auditor in the letter that PTI has reviewed, according to its annual report for FY19, the bank has had three auditors — Lakdawala & Co, Ashok Jayesh & Associates and DB Ketkar & Co since FY11. Emails sent to all these auditors by PTI did not elicit response even after 24 hours.
‘Bank was growing’
“Since the bank was growing, statutory auditors, due to their time constraints, were checking only the incremental advances and not the entire operations in all the accounts,” Mr. Thomas claimed in the letter. “The statutory auditors… scrutinised the accounts which were shown to them by the bank,” he added.
Mr. Thomas confirmed that the exposure to the bankrupt HDIL Group continued to remain ‘standard’ despite a delay in repayments for over three years.

Source : https://www.thehindu.com/todays-paper/tp-business/pmcs-suspended-md-says-auditors-did-superficial-job/article29579880.ece

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