SC rejects Amit Goenka's plea against KPMG as auditor in Shirpur Gold case

The Supreme Court on Tuesday dismissed Essel Group's Amit Goenka’s plea challenging the Securities and Exchange Board of India's (Sebi) decision to appoint KPMG Assurance and Consulting Services LLP (KPMG) as a forensic auditor in its probe into the Shirpur Gold Refinery fund siphoning case.

The bench consisting of Justice Hrishikesh Roy said they found no infirmity with the Bombay High Court order of August 14, which had dismissed Goenka’s plea. “The petition is accordingly dismissed. It is needless to say that all contentions kept open for the petitioner (that is Goenka) in the impugned order (Bombay HC order) will remain so, notwithstanding the present dismissal order,” the court said.

Sebi, in its 2021 communication, had appointed KPMG Assurance and Consulting Services as a forensic auditor to review the financial statements of Shirpur Gold Refinery Ltd for the financial years 2018-2019 through 2020-2021, and KPMG had submitted a report in March 2023.

The market regulator had on April 25, 2023, issued a show-cause notice to Amit Goenka, chairman of Essel Group, debt-ridden Shirpur Gold Refinery, and five others for alleged fraudulent practices and manipulation of financial statements. Goenka served as the debt-ridden company’s non-executive chairman in 2021-22.

The regulator has directed them not to dilute or sell their holdings in the company. In an interim order, Sebi noted that Shirpur had allegedly created a scheme to divert funds from debtors to entities of promoter groups. “It appears that the main reason for Shirpur's defaults to lenders is non-receipt of funds from its debtors amounting to Rs 404 crore. The same appears to be part of a well-designed scheme devised by promoters to move the funds out of Shirpur and transfer them to their accounts while misusing the IBC process,” noted whole-time member of Sebi, Ashwani Bhatia, in the order.

Sebi had given 21 days to Goenka and the others to file responses or objections.

After the Bombay HC dismissed Goenka’s appeal, it said he was free to pursue the matter before Sebi in accordance with the law.