ICAI's Financial Reporting Review Board to review Gensol's books

The Financial Reporting Review Board (FRRB) of the Institute of Chartered Accountants of India (ICAI) has decided to review the financial statements and the statutory auditor’s report of Gensol Engineering and BluSmart Mobility Private Limited for the financial year 2023–24, the Institute said on Wednesday.

 

The review is being undertaken by the ICAI on a suo motu basis, Charanjot Singh Nanda, president, ICAI, said.

 

Last week, an order by the Securities and Exchange Board of India (Sebi) said that the steep decline in the promoter’s stake was not organic but allegedly orchestrated through a network of false disclosures, sham transactions, and diverted funds, which effectively led to a near-total promoter exit, even as unsuspecting investors were left holding the bag.

 

In the past also, the FRRB has suo motu undertaken reviews of financial statements of certain banks and other enterprises for accounting irregularities and non-compliances, such as Byju.

 

The FRRB reviews compliance with the reporting requirements of various applicable statutes, accounting standards, and standards on auditing.

 

Based on its findings, the FRRB would refer the matter to ICAI’s disciplinary committee for further action.

 

While ICAI’s jurisdiction extends to non-listed companies, sources said that the Institute holds the view that it can review any auditor who is a member of the ICAI.

 

The government is considering initiating a probe by the Serious Fraud Investigation Office (SFIO) against Gensol Engineering and its promoters, according to sources.

 

The Ministry of Corporate Affairs, government sources said, is also conducting its due diligence in the Gensol Engineering fund diversion matter through its Director General and the Registrar of Companies offices.