Rotomac case: ICAI to probe CAs’ role

KANPUR: The Institute of Chartered Accountants of India (ICAI) will probe into the conduct of chartered accountants (CAs) associated with Rotomac company whose promoter Vikram Kothari has been accused of bank loan default of ₹2,919 crore.

Chairman of the Central India Regional Council of ICAI (CIRCICAI) Deep Kumar Misra said a probe would be initiated to find out if the CAs associated with the company followed standard norms .

The Central Bureau of Investigation (CBI), enforcement directorate (ED) and income tax department have already initiated criminal proceedings against Vikram Kothari, his wife Sadhana and son Rahul.

“Action will be taken if the involvement of CAs is found in any irregularity. Bank auditors cannot be held guilty as their role was very limited,” he said.

Misra said auditors were supposed to verify that the terms and conditions for obtaining loan were strictly followed.

He said ICAI had the right to conduct suo motu probe on the basis of media reports.

“CAs are supposed to give statutory report to the bank after auditing loan transaction and send a copy to the Reserve Bank of India (RBI) through the bank concerned. In this case, the report submitted by the chartered accountants will be examined,” Misra said.

He said the RBI also prepared an inspection report regarding loans sanctioned by the banks to companies. “RBI’s inspection report will also be important in fixing the responsibility of fraud,” Misra said. “The screening committee issues notice to chartered accountants and seek their explanation. A show cause notice is issued to them and the proceedings of disciplinary action are on the pattern of the courts,” he said.