Firstpost
  • Home
  • Video Shows
    Vantage Firstpost America Firstpost Africa First Sports
  • World
    US News
  • Explainers
  • News
    India Opinion Cricket Tech Entertainment Sports Health Photostories
  • Asia Cup 2025
Apple Incorporated Modi ji Justin Trudeau Trending

Sections

  • Home
  • Live TV
  • Videos
  • Shows
  • World
  • India
  • Explainers
  • Opinion
  • Sports
  • Cricket
  • Health
  • Tech/Auto
  • Entertainment
  • Web Stories
  • Business
  • Impact Shorts

Shows

  • Vantage
  • Firstpost America
  • Firstpost Africa
  • First Sports
  • Fast and Factual
  • Between The Lines
  • Flashback
  • Live TV

Events

  • Raisina Dialogue
  • Independence Day
  • Champions Trophy
  • Delhi Elections 2025
  • Budget 2025
  • US Elections 2024
  • Firstpost Defence Summit
Trending:
  • Charlie Kirk shot dead
  • Nepal protests
  • Russia-Poland tension
  • Israeli strikes in Qatar
  • Larry Ellison
  • Apple event
  • Sunjay Kapur inheritance row
fp-logo
Amrapali fund diversion: Why auditors should be sent to cleaners for enabling dubious cash deals
Whatsapp Facebook Twitter
Whatsapp Facebook Twitter
Apple Incorporated Modi ji Justin Trudeau Trending

Sections

  • Home
  • Live TV
  • Videos
  • Shows
  • World
  • India
  • Explainers
  • Opinion
  • Sports
  • Cricket
  • Health
  • Tech/Auto
  • Entertainment
  • Web Stories
  • Business
  • Impact Shorts

Shows

  • Vantage
  • Firstpost America
  • Firstpost Africa
  • First Sports
  • Fast and Factual
  • Between The Lines
  • Flashback
  • Live TV

Events

  • Raisina Dialogue
  • Independence Day
  • Champions Trophy
  • Delhi Elections 2025
  • Budget 2025
  • US Elections 2024
  • Firstpost Defence Summit

Amrapali fund diversion: Why auditors should be sent to cleaners for enabling dubious cash deals

S Murlidharan • October 26, 2018, 09:48:14 IST
Whatsapp Facebook Twitter

That Amrapali auditors turned a blind eye to its management’s shenanigans for a quid pro quo, makes it a Satyam redux.

Advertisement
Subscribe Join Us
Choose
Firstpost on Google
Choose
Firstpost on Google
Amrapali fund diversion: Why auditors should be sent to cleaners for enabling dubious cash deals

Nothing hurts more than the spectacle of insiders bringing down the house. More so when the insider happens to be the one vested with the mandate of keeping an eye on the wayward insiders. That Amrapali auditors turned a blind eye to its management’s shenanigans for a quid pro quo, makes it a Satyam redux. Ramalinga Raju of Satyam infamy jacked up the sales of the company by introducing into the books of account a whopping Rs 4,000 crore fictitious sale and to match the credit he debited fixed deposits of the same amount. The statutory auditors PricewaterhouseCoopers (PwC) didn’t care to ask for confirmation of the fixed deposits with the concerned banks, a rudimentary precaution taken even by rookie auditors. [caption id=“attachment_4325839” align=“alignleft” width=“380”] ![Realty. File image. Reuters.](https://images.firstpost.com/wp-content/uploads/2018/01/REALTY_reuters.jpg) Realty. File image. Reuters.[/caption] What makes the act of the statutory auditor of Amrapali even more shameful and damning is it allegedly took Rs 125 crore in the name of Gauri Suta Infrastructures Pvt Ltd which was worth only Rs 75,000. Obviously, the statutory auditors took hush money to overlook diversion of funds belonging to the homebuyers to the tune of Rs 2,765 through a maze of 20 shell companies. The startling revelation has been made by forensic auditors Ravi Bhatia and Pawan Aggarwal appointed by the Supreme Court to get at the bottom of the truth. In the US, peer review is the norm both in the world of auditing and surgery. In the weekly or fortnightly meeting to analyse death on the operation table, colleagues tear into the surgeon who had allegedly botched up the surgery. This keeps everyone on their toes all for the betterment of services to patients. Ditto with auditors. In India, we have an apology of peer review of an auditor’s work. For the first time, the apex court serendipitously proved the immense potential of peer review and forensic audit. Forensic audit has been shied away by the auditing community under the self-serving excuse harking back to the last century—the House of Lords homily that auditors are watchdogs and not bloodhounds. A lot of water has since flown down the bridge. It is time this lame excuse for inaction was wrenched away from the auditors.

Auditors are the quintessential whistleblowers. Sadly in L’affaire Amrapali the statutory auditors far from blowing the whistle, actively participated in the loot and self-aggrandizement.

The Real Estate Regulation Act (RERA) mandates builders to deposit at least 50 percent of the money collected from homebuyers in an ESCROW account. In its pristine form, the mandate was to deposit 75 percent but somehow the powerful builders’ lobby seems to have softened the blow through hectic lobbying. Be that as it may. One suspects even the diluted minimum is complied with more in breach than compliance much to the chagrin of the hapless homebuyers. It is worth drawing a parallel between builders and long-term capital gain earners from sale of residential properties—they have to deposit the LTCG in Capital Gains Accounts Scheme 1988 which is nothing but an ESCROW account which the banker allows to be withdrawn only for buying or constructing another residential house within two and three years respectively. Why can’t the more resourceful builders then be made to deposit every rupee into the ESCROW account and allowed to withdraw subject to safeguards to foil diversion of homebuyers’ hard-earned money. Coming back to Amrapali, the Supreme Court should do an encore of Skipper Construction Ltd and do complete justice to homebuyers invoking article 142 of the Constitution. And by doing so it would be using this extraordinary power in favor of the small man, namely the homebuyers as against buyers of commercial flats in Skipper. A forensic audit is a good first step. Hopefully, the Supreme Court would lift the corporate veils of all the 20 conduits and retrieve the loot for the poor homebuyers. And the statutory auditor of Amrapali should be sent to the cleaners by the Council of the Institute of Chartered Accountants of India instead of investigating him under its self-regulatory powers. Yes, he should be tried by the High Court for his brazen professional misconduct. The fence should not be allowed to eat the crop. If the forensic auditor’s preliminary findings are true, it has been a Faustian deal between Amrapali promoters and its auditors who have allegedly sold their soul for a mess of pottage. (The writer is a senior columnist and tweets @smurlidharan)

Tags
ConnectTheDots PwC Satyam realty Amrapali Ramalinga Raju fixed deposits Forensic audit fund diversion RERA Homebuyers LTCG Escrow account Ravi Bhatia Pawan Aggarwal rookie auditors Skipper Construction Ltd
  • Home
  • Business
  • Amrapali fund diversion: Why auditors should be sent to cleaners for enabling dubious cash deals
End of Article
Latest News
Find us on YouTube
Subscribe
  • Home
  • Business
  • Amrapali fund diversion: Why auditors should be sent to cleaners for enabling dubious cash deals
End of Article

Impact Shorts

Chennai Ranks #1 in Challan Checks: ACKO Insights for Smarter Car and Two Wheeler Insurance Decisions

Chennai Ranks #1 in Challan Checks: ACKO Insights for Smarter Car and Two Wheeler Insurance Decisions

Chennai leads India in challan checks, with drivers checking their e-challans over 5 times a month on average. Helmet non-compliance is the most broken rule, accounting for 34.8% of all traffic offences in Chennai. Regular digital challan checks help drivers avoid hefty fines, promote safe driving, and improve insurance premiums.

More Impact Shorts

Top Stories

US ready to ‘impose costs’ on Russia if war in Ukraine drags on, says Hegseth

US ready to ‘impose costs’ on Russia if war in Ukraine drags on, says Hegseth

US tells Hamas to stop violence against Gaza civilians and disarm 'without delay'

US tells Hamas to stop violence against Gaza civilians and disarm 'without delay'

China seizes 60,000 maps mislabelling Taiwan, omitting South China Sea islands

China seizes 60,000 maps mislabelling Taiwan, omitting South China Sea islands

Syria’s Sharaa pledges to honor Russia ties, seeks economic and military support in Kremlin visit

Syria’s Sharaa pledges to honor Russia ties, seeks economic and military support in Kremlin visit

US ready to ‘impose costs’ on Russia if war in Ukraine drags on, says Hegseth

US ready to ‘impose costs’ on Russia if war in Ukraine drags on, says Hegseth

US tells Hamas to stop violence against Gaza civilians and disarm 'without delay'

US tells Hamas to stop violence against Gaza civilians and disarm 'without delay'

China seizes 60,000 maps mislabelling Taiwan, omitting South China Sea islands

China seizes 60,000 maps mislabelling Taiwan, omitting South China Sea islands

Syria’s Sharaa pledges to honor Russia ties, seeks economic and military support in Kremlin visit

Syria’s Sharaa pledges to honor Russia ties, seeks economic and military support in Kremlin visit

Top Shows

Vantage Firstpost America Firstpost Africa First Sports
Enjoying the news?

Get the latest stories delivered straight to your inbox.

Subscribe
Latest News About Firstpost
Most Searched Categories
  • Web Stories
  • World
  • India
  • Explainers
  • Opinion
  • Sports
  • Cricket
  • Tech/Auto
  • Entertainment
  • IPL 2025
NETWORK18 SITES
  • News18
  • Money Control
  • CNBC TV18
  • Forbes India
  • Advertise with us
  • Sitemap
Firstpost Logo

is on YouTube

Subscribe Now

Copyright @ 2024. Firstpost - All Rights Reserved

About Us Contact Us Privacy Policy Cookie Policy Terms Of Use
Home Video Shorts Live TV