In an attempt to boost investor confidence, which has taken a beating in the aftermath of the Satyam fraud, GMR Infrastructure on Saturday said it will appoint joint auditors to undertake the statutory audit of the company and its subsidiaries.
PriceWaterhouse, which audited the accounts of Satyam, was also the auditor for GMR Infrastructure. Further, its board member TR Prasad, who was also on the board of Satyam as an independent director, had relinquished his post a few days ago for personal reasons.
"This is to demonstrate our commitment to maintain high standards of corporate governance and transparency in our business. First, we will implement this with our listed company GMR Infrastructure and will then extend to other group companies," said Ashuthosh Agarwala, chief financial officer of the GMR Group.
He said such a system could provide adequate checks and balances to oblige with the corporate governance standards.
The G M Rao-led GMR Group has interests in airports, energy, highways, urban infrastructure, special economic zones, and agri-business such as sugar.
Sources said GMR could be the first major Indian corporate to engage multiple auditors.
"Individual companies and share holders have the liberty to decide whether they require multiple audits or require replacement of the existing auditor to show transparency in their accounts," said a lawyer, who preferred anonymity.
GMR will also rotate the auditors at periodic intervals. The length of the period for rotation of auditors shall be such as may be decided by the company board, based on the recommendation of the audit committee, GMR said in a communication to the stock exchanges, while announcing its board's decision to implement a framework for the appointment of auditors.
The company will also employ the services of reputed audit firms for specific assignments of audit as may be decided by the company's board from time to time on the recommendation of the audit committee.
'The objective of utilisation of services of reputed professional firms as contemplated herein is to have reinforced checks and balances on the financials and corporate governance practices of the company and its subsidiaries,' GMR said in the statement on Saturday. The joint auditors will be appointed at the earliest as per the provisions of the Companies Act, 1956, and other applicable regulations, the statement added.
