Forensic audit finds no fraud, fund diversion at Reliance Home Finance

Reliance Home Finance on Sunday said an independent forensic audit, mandated by lenders, has found no fraud, embezzlement or diversion and siphoning of funds in the company that is seeking debt resolution.

In a statement, the company said the audit made "no adverse findings" on the quantum and end-use of lending.

As part of the debt resolution process, lenders of the company, which had defaulted on some debt repayment obligation following the crisis in shadow banking industry, appointed Grant Thornton in August 2019 for forensic audit, as required under the RBI guidelines on Prudential Framework for Resolution of Stressed Assets under change of control and management.

The forensic auditors were specifically mandated by the lenders, as part of the Terms of Reference, to report on any diversion/ siphoning of funds, any embezzlement, malafide operations, falsification of accounts, fraudulent transactions and whether any frauds by promoter, company, employees or any associates had been observed, it said.

"The forensic auditors have submitted their report, and there are no adverse findings recorded on 11 key parameters, including diversion and siphoning of funds; embezzlement, malafide operations, falsification of accounts, fraudulent transactions and frauds," it said.

The forensic report has confirmed the potential group entities exposure through several intermediate unlisted entities at Rs 7,984 crore (including interest).

Reliance Commercial Finance also made an almost identical announcement.

"There is no adverse finding in this regard either, in the forensic audit report," the company said.