Accel Frontline suspends executive chairman based on special audit report

The decision against N R Panicker was taken on the basis of the report submitted by Deloitte Touche Tohmatsu India LLP

IT services firm Accel Frontline said the company's board of directors had suspended N R Panicker from his position as executive chairman with immediate effect.

The decision against Panicker, an erstwhile promoter of the company, was taken on the basis of a special audit report submitted by Deloitte Touche Tohmatsu India LLP.

The Securities and Exchange Board of India (Sebi) last week revoked an earlier interim order against the company, which froze shares of the promoters and the promoter group shareholders following an alleged non-compliance with the minimum public shareholding norms.

The company, in a regulatory filing with the stock exchange, said that its board of Directors suspended N R Panicker from his position as executive chairman, though he will continue as director of the company till his term ends on March 31, 2016.

The action was taken on the basis of the report of Deloitte, appointed suo motu by the company to examine the quality of bills receivable of the company for the three-year period ended March 2015.

It further added that the board has constituted a sub-committee comprising of three independent directors, the executive director and chief financial officer to look into the special audit (review) report and recommend to the board further steps or actions to be taken.

In its preliminary finding, the auditor has said that based on the investigation till then, bills receivable which may not be adequately substantiated, and other items to the tune of Rs 30 to 40 crore, which may not have been adequately provided for in the books of the company. This information was filed by the company in a regulatory filing on February 9, 2016.

Japan-based CAC Corporation has acquired majority stake in Accel Frontline Limited, from the end of 2013 and is the promoter of the company at present. At present, the promoters, including CAC Holdings Corporation has around 75 per cent share holding in the company.