InvestorQ : Why did the auditors of GVK Group opt to resign from the company?
Anu Biswas made post

Why did the auditors of GVK Group opt to resign from the company?

Ria Jain answered.
11 months ago

The auditors of the GVK Group of Hyderabad, Price Waterhouse, resigned from its position citing lack of information provided by the company to prepare financial statements for the 2019-20 financial years. GVK is yet to finalize the accounts for the last fiscal year.

GVK, which runs the prestigious Mumbai Airport, is being currently probed by several investigation agencies including the CBI and the ED. These agencies have alleged that the promoter, GVK Reddy and his son, Sanjay Reddy, had allegedly siphoned funds worth Rs.705 crore from Mumbai International Airport Ltd.

It has also been alleged that these funds siphoned from the MIAL account was used by the group to fill the financial gaps in its other group firms. The ED has already conducted searches at the homes and offices of GVK Group in Mumbai and Hyderabad.

Price Waterhouse had been appointed for 5 years in September 2017. However, they admitted that it was becoming increasingly difficult as despite several communications to the group and its promoters, they did not furnish them with necessary information.

Indian auditors have been under a lot of pressure of late due to frequent cases of auditor lapses as in the case of Satyam in 2000 and later in cases like IL&FS as well as DHFL. This has made auditors a lot more cautious with companies that are less than transparent.