Following suggestions from the Reserve Bank of India, the Institute of Chartered Accountants of India has sought explanation from the auditors of crisis-ridden Global Trust Bank and said it was enquiring into the financial problems of the private bank that is being merged with Oriental Bank of Commerce.
"We have written a letter to the auditors and have asked them to clarify their stand on the issue," ICAI president Sunil Goyal told PTI, adding auditors of "more than one year" have been asked to furnish details.
The Global Trust Bank Crisis: Complete Coverage
While Lovelock & Lewes were the auditors in 2001-02, they were replaced by Pricewaterhouse Coopers in 2002-03. Then M Bhaskara Rao & Co replaced PwC.
"The disciplinary cell of ICAI has also started examining the whole issue and will speak to all the parties concerned, which includes the bank's management, the auditors and the RBI," he said.
ICAI swung into action after RBI forwarded a report to it about the failure of auditors to foresee the trouble in GTB. The bank has been hit hard by high level of non-performing assets, which among other things, resulted in net loss of Rs 272 crore (Rs 2.72 billion) in 2002-03.
Goyal said the auditors had been given a time of about two weeks to reply to the queries.
"We want to expedite the whole issue in the interest of the public at large," he said. He refused to give any time-frame for the exercise.