NEW DELHI: As the economic offences wing (EoW) of the Mumbai Police has lodged a first information report (FIR) against Punjab and Maharashtra Co-operative Bank (PMC Bank) chairman and officials and with Enforcement Director (ED) likely to step in, auditors of the company are already under the agency scanner and likely to be questioned soon.
“The auditors had not been named in the FIR but we are not ruling out their role in it. There have been lapses and it will be clear once a forensic auditor comes,” a senior official, ED, told TMS.
The official said the agency has been informed about the case and will soon register a case under the Prevention of Money Laundering Act 2002 based on the EOW FIR.
In a five-page letter to the Reserve Bank of India (RBI), PMC Bank former MD Joy Thomas had admitted to falsifying accounts, creating dummy accounts to hide the defaults and not classifying the accounts of HDIL as non-performing assets. It also explained how it never got detected by auditors.
“Since the bank was growing, the statutory auditors, due to time constraint, were checking only the incremental advances and not the entire operations of all the accounts. They validated the incremental loans and advances and scrutinised the accounts which were shown by us,” the letter said.
“In RBI inspection prior to 2015, officers use to check mostly top few borrower accounts reported by the bank branch-wise, therefore, these accounts did not come into picture and it was around 2017 onwards when the RBI started asking for indent for the advances master. The stressed legacy accounts belong to this group was replaced by dummy accounts to match the outstanding balances in the balance sheet.,” the letter said.