Ketan Parekh scam: ICAI blames litigations for delay in action

With over a decade having passed since auditors' role came into question in the Ketan Parekh stock market scam, auditing regulator ICAI has blamed "litigations and frequent adjournments" for delay in its action against the concerned member auditors.
In an action taken report submitted to Joint Parliamentary Committee (JPC), the Finance Ministry has said that except for the auditors issue, rest of the 275 recommendations of the panel have been taken care of.
On its part, auditing firm Price Waterhouse said that the proceedings initiated before ICAI against the concerned individuals were at various stages of determination at the Institute of Chartered Accountants of India (ICAI).

Emphasising that it is now on course to fast-track the proceedings, ICAI said the next hearing of the respondents is scheduled for July 7-8 while no more adjournments would be allowed.
The role of statutory auditors of erstwhile GTB had come under the scanner in the backdrop of Ketan Parekh stock market scam that came into light in 2000-01 period.
The JPC on stock market scam and related matters, which had submitted its report in December, 2002, had come up with 276 recommendations, including ICAI action against GTB auditors for dereliction of duty.

For the 2002-03 period, the members answerable as disclosed by the respondent firm -- Price Waterhouse & Co -- were Partha Ghosh and D V P Rao, the report said.

In a statement, ICAI said the delay in concluding proceedings has been solely on account of various litigations initiated in related matters by the respondents which takes its own time in the courts of law and also on account of frequent and periodical adjournments taken by the parties in the hearings fixed.
Disciplinary proceedings against the statutory auditors of GTB for financial years 2000-01, 2001-02 and 2002-03 were initiated by ICAI following the JPC report.
The disciplinary committee concluded its hearing in all matters pertaining to GTB's statutory auditors for financial years 2000-01 and 2001-02. The respondents were found guilty of professional misconduct.

However, with respect to the committee's hearings related to statutory auditors for the financial year 2002-03, the respondents had challenged procedure and hearings were re-fixed after August, 2009.
According to the statement, hearings could not be taken up between 2010 and 2013 due to pendency of a petition.
In its judgement in May this year, the Supreme Court had upheld the procedure being followed by the disciplinary committee, ICAI noted.
"As of now, the last hearing was fixed and held on May 21, 2015 wherein the respondents again sought adjournment and wherein it was decided that the same would be the last adjournment being granted," the statement said.