HC orders issue of notice to BOB

The Madras High Court today ordered issue of a notice to Bank of Baroda and its Executive Officer on a petition by a chartered accountant seeking to restrain the institution from awarding the concurrent audit assignments to the successful bidder as per the March 31 tender notification.
Justice R Subbiah ordered the issue of notice returnable by April 29 on a petition from Venkata Siva Kumar.
Kumar sought a direction to the bank's Executive Office to constitute a committee of experts in the area of banking, finance and audit in consultation with RBI and the Institute of Chartered Accountants of India, New Delhi, for studying the tendering process and make suitable recommendation.

Italso prayed for a direction to the Central Vigilance Commission or any such inquiry committee to investigate and unravel the irregularities, conspiracy and criminal breach of trust, if any, in the award of the contract and reportit to the High Court for further action within a specified period.
He contended that the March 31 notification was against public interest and violative of Article 14 of the Constitution.
"The terms of the contract specifying a minimum turnover of Rs 150 crores is arbitrary, capricious and irrational, made with amala fide intention to eliminate all the medium and small Indian audit firms and pave way for an indirect entry of multi-national audit firms into this public sector bankand latter spread to other Indian public sector banks, seriously jeopardising the economic interests of India", he contended.

Specifying a minimum turnover ofRs 150 crores per annum as an eligibility criteria, paying them exorbitant fees and at the same time giving an option to the successful bidder to network and sub-contract the work is only aimed at giving the MNC firms uncontrolled powers without any accountability, which is against the economic interest of the nation, he submitted.
The successful bidder who can only be the large MNC audit firms will not be made accountable for frauds and other scams as it happened in the case of Satyam Computers though the auditors Price Water House (PWC) charged exorbitant fees but when the corporate fraud was reported, only the Indian partners were penalised and PWC was not even made a party in the criminal proceedings for reasons unknown, he submitted.

The same situation will arise for the sub-contract members who will be penalised, he said.