PMC Bank: Who Is the Mysterious Auditor Lakdawala & Co?
Newer revelations on the Punjab and Maharashtra Cooperative Bank (PMC Bank) and releated entities continue to surprise depositors and investors. The latest is the mysterious audit firm Lakdawala & Co, which audited the Bank for FY18-19. Lakdawala & Co has audited PMC Bank and, in its report, has mentioned about doubtful recovery of assets against which a provision of Rs26.82 crore has been made by the Bank. 
 
This morning, the Institute of Chartered Accountants of India (ICAI) issued a press release claiming to have initiated disciplinary action against the firm. Moneylife was told by Mumbai chartered accountants (CA) active in professional CA bodies that they had not come across the firm in their interactions.
 
Brajesh Mishra of Zee News, however, tracked down the firm's office address, only to find it locked and located in a housing society in Borivali with no board or nameplate to indicate its existence.
 
But it now appears that Ladkawala & Co and its CA partner KP Lakdawala (Membership No.035633) may have its fingers in many more dangerously sticky deals which need a full investigation.
 
  
 
Interestingly, there is another firm, Lakdawala & Associates, (ICAI Registration No.105518W) that has audited Talwalkars Lifestyles Ltd (now Talwalkars Healthclubs Ltd) during FY17-18, as per data from the BSE
 
KP Lakdawala, who is shown as partner in Lakdawala & Co (auditor of PMC Bank) is shown as proprietor of Lakdawala & Associates in the audit report of Talwalkars Lifestyles.
 
  
 
Lakdawala & Associates has its office at D14, Bansinagar, Off Western Express Highway in Borivali (east) at Mumbai, the same audit report shows. 
 
As per records from LinkedIn, there is one Ketan Lakdawala named as CA at Lakdawala & Associates since January 2009. This Mr Lakdawala had worked with PCH Ansotia & Co (Deloitte, Haskins + Sells) and Deloitte for four years during 1984-1988. However, there is no information about what he was doing between 1988 and 2009 as per LinkedIn records. 
 
The status of Talwalkar Lifestyle’s accounts could be another can of worms and we found that it is already in the process of being investigated. But that will be a separate story and ICAI probably is going to have its work cut out if it is serious about investigating the firm. 
 
As regards PMC Bank, ICAI’s press release suggests that it is clueless about the firm. Yet, the Institute claims it has "...triggered disciplinary mechanism by writing to the concerned Bank and also to all concerned regulatory agencies, the vigilance department of RBI and the commissioner of Maharashtra co-operative societies, requesting them to provide requisite details of their findings related to it along with details of any member or firm alleged to be involved in the said matter."
 
This bland release does not even mention the firm. It says, "ICAI has also written to the statutory auditor of PMC Bank pertaining to financial years 2017-18 and 2018-19 seeking clarification on the matter. ICAI would be actively pursuing the issue with the concerned regulators so as to examine the matter in detail and would also take action through its proactive disciplinary process against any member, if so, found to be involved in the matter," the regulatory body of CAs says.
 
Here’s what Lakdawala certified in its audit report. 
 
 
On Tuesday, Talwalkars Healthclub closed 5% down or at its 52-week low at Rs5.48 on the BSE, while the 30-share Sensex ended the day marginally down at 38,305. 
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    COMMENTS

    Pakshal Katariya

    2 weeks ago

    ICAI doesn't allow its members to have specialization in a particular subject & annex the tag, that's why you find lot of CA Firms doing work that they aren't even good in. ICAI must improve its standards, anyway the no. of students have decreased significantly, the situation will get worse.

    Suketu Shah

    2 weeks ago

    Vast no of CA's are in such dire conditions that they offer unsolictedly management consultancy,equity consultancy,etc (as if their customers are idiots)to destroy yr wealth.Best is to avoid such CA's like plague and blacklist them.

    nadeem

    2 weeks ago

    Auditors are qualified people keeping the common man hidden from scams...!

    AAR

    2 weeks ago

    People are getting agitated for every scams. To me the biggest untold scam is LIC. It is the most abused Financial organization. It is running because of perennial inflows from premiums. The day that stops, the scam will come out.

    REPLY

    Nagaraju Bommanahalli

    In Reply to AAR 2 weeks ago

    Yes most of the LIC money invested in fraud companies on the direction of the big political leaders,there share prices touched the bottom level, for example Rs25000crores money invested in IDBI bank by the direction of the great prime Minister,now it value isRs12000 crores,same type in all , prime Minister directed to invest in IDBI to avoid bankruptcy of the banks, this bank gave huge fraud loans to big companies by the direction of the big political leaders,in few years most of the companies Banks become bankruptcy

    Nagaraju Bommanahalli

    2 weeks ago

    In India nobody knows how Indian companies are doing fraud from the beginning to last ,for example a big business men will start the company in India as below .His companies actual value is Rs2000crores but with the help of the auditors,Banks,and chartered accountants he made his company s values to RS 6000 crores by book adjustment with bribe and he call IPO that is in share market and collect Rs10000 crores in share market, first he pumped 60%of money to foreign country in the name of business and will deposit most of the money in his name next he will file bankruptcy due to losses and will write off all the loans this is the business doing in India ED is doing drama ICICI Bank chandakochar is well known to all she done huge fraud in ICICI Bank, this drama of enquire is doing from past one year, but still she is not arrested, reasons In this icici bank scam all SEBI auditors ED RBI central government rating agencies big leaders of all parties involved.central government making all efforts to avoid arrest these fellows,if arrested all all foreign country become knows most of the Indian companies running on bogus and take away all foreign investment,then India become bankruptcy.This is well known by central government hence avoiding all efforts to arrest directors of icici bank chandakochar DHFL jetairways Videocon kingfisher airline PNB bank head [email protected] etc . wait in few months most of the common people investment in icici bank NBFC PSU banks equity NCD mutul funds become Zero
    Even though so much corruption in 95% banks,no arrest of chairman of theses Banks, because in this scam both parties involved, only common people will loose their hard earned money,all political leaders enjoying our money

    A BANERJEE

    2 weeks ago

    I can quote several such instancesvof dubious audit report of dubious 'auditors' including ITPs masquerading as 'auditors'.

    KAVIRAJ B PATIL

    2 weeks ago

    ICAI like the old MCI is more known for non performance than anything else. However, no one in the govt. is showing interest is cleaning the mess.

    RAMESH VORA

    2 weeks ago

    TIME has come for the constitution of authority like SFIO
    to investigate all aspects of fraud in coop bank. so far as i know that none of the investigation report on the fraud investigation reports are made public. . Very few instances are come to my knowledge for the concerted time bound action against perpetrator of the culprits. lacdiacsical attitude will not go long way to restore the faith of shareholders and depositors of coop bank.What TAFCUB is doing in this regard.

    RAMESH VORA

    2 weeks ago

    Who will be responsible is a big question today. No one will own up the present position of the bank. RBI started throwing responsibility on Central Registrar, Ministry of Agriculture and Cooperation. Why RTI act is not made applicable to co-op banks? Why RBI is taking consistent stand in Apex court for the secrecy of NPA ACCOUNTS? Refer SC judgement JAYANTILAL MISTRY in the matter. It is eye opener .

    REPLY

    chandrashekar

    In Reply to RAMESH VORA 2 weeks ago

    The fundamental question is "who appointed the audit firm" to audit PMC Coop Bank? Was the Audit firm shortlisted by RBI/ Central Registrar of Coop Societies to audit a SCHEDULED BANK? Or, the Management of PMC just picked up the firm for their convenience? The process, if explained, would be revealing major chinks.

    Ranbir Lamba

    2 weeks ago

    Cancel licence & book them
    Tainted Auditors

    Sell shares of
    Talwalkar Lifestyle’s & save skin

    Day traders make money by sell mode

    accounts could be another can of worms and we discover that it is already in the process of being investigated and unearthed

    Dharam Vir Narang

    2 weeks ago

    Audit prooved to be eyewash.

    Dharam Vir Narang

    2 weeks ago

    Audit seems to a big joke.

    Gopalakrishnan T V

    2 weeks ago

    No governance and no Government seem to be in existence the way frauds and loot take place. The easiest source of loot is banks. With right connections , contacts, one can loot till the greed is satisfied. Public beware.

    Pankaj Mahidhar

    2 weeks ago

    Has ICAI ever been able to pre-empt an unscrupulous member despite having so many gatherings and programmes including some compulsory training for credits? I feel they more or less operate like a union to protect members when in difficulty and it is more like "Teri bhi chup and meri bhi chup" otherwise the members are smart enough to smell a rat easily almost like detectives.

    REPLY

    Suketu Shah

    In Reply to Pankaj Mahidhar 2 weeks ago

    well said.

    kpushkar

    2 weeks ago

    It shows competance level of ICAI...and authority as well .

    NSE Suspends Kolkata-based BMA Wealth Kreators
    The National Stocks Exchange (NSE) has suspended Kolkata-based BMA Wealth Kreators due to non-compliance of the regulatory provisions. The brokerage seems to be closing its operations. BMA Wealth Kreators claims to have a presence across multiple states and has a licence to trade in the capital market, futures & options, currency derivatives and mutual fund service system (MFSS) segments.
     
    BMA Wealth Kreators had made news in 2011 when it had signed up the highest-paid actress Kareena Kapoor for a television commercial to promote lowest cost transactions at ‘just 1 paisa per trade’. 
     
    BMA website claims that it has 10.75 lakh customers across 42 branches in India. The company was started in 2004 and its net profit for FY2017-18 was claimed to be Rs48.7 lakh. 
     
    Deven Choksey of KR Choksey Investment Managers told NDTV that “suspension of a big broker by the NSE has triggered a sense of panic in the market”.
     
    A message sent by a trader from the broking house advised customers to wait for official communication from the Exchange and company on withdrawal of funds and securities. 
     
    The message further reads “All the clients who have funds/securities less than Rs25 lakh have been insured by Exchange. For the funds or securities more than Rs25 lakh, which will take 3-6 months, there will be arbitration after formal complaint to the exchange. Clients are requested to file a complaint with SEBI and NSE. All the open positions will be closed from exchange tomorrow morning. Please be informed that we, employees had no idea about these developments and are still waiting for our salaries and official communication from company but request to file complaint with exchange/SEBI as earliest so as to build pressure on the regulator.”
     
    Clients whose funds are in DP can get their shares transferred to other DP. The following contact details may help. Check this link for more details https://investorhelpline.nseindia.com/NICEPLUS or you can send email to [email protected] or call 1800-266-0050 to NSE or 1800 266 7575 to SEBI.
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    COMMENTS

    Anand

    2 weeks ago

    Not Sure if majority of CA's are selling thier mothers just for some amount of money ? They do not think, with their actions with respect to bank, financial institutes and any thing related to money will lead to such consequnces.

    I am feeling very pity as Money is becoming problem for all bad thoughts and it is being supported by our financial people(Auditors). All news across the world and at every segment. From banks to medical to DRDO to taxation to dept of commerce.

    Thank to un-sung CA's/financers/whistel-blowers/heros who do great job and maintain their values for their family, society and country.

    Ramesh Poapt

    2 weeks ago

    wealth destroyers not Kreaters!

    Suketu Shah

    2 weeks ago

    Why have they banned only 1 wealth management company in the whole country.All shd be banned.Its a scam.All are cheats.

    Bombay Mercantile Coop Bank Fools People by Claiming That RBI Lauded the Bank
    The controversial Bombay Mercantile Cooperative Bank (BMCB), which has been mired in controversy for decades has published an advertisement in Business Standard today, which claims, “Reserve Bank of India (RBI) has expressed its satisfaction about the performance of the bank in its audit report and lauded the efforts that are undertaken within the rules and regulations”. 
     
    BMC Bank’s brazen claim, in the wake of the massive fraud and stringent restrictions on Punjab and Maharashtra Cooperative Bank (PMC Bank) have astonished bankers, since the RBI is not known to hand out such certificates, especially in “audit” reports. A top central banker (now retired says), “Such assertions are false misrepresentations and are downright dangerous for the consumers”.
     
    Moneylife has messaged the image to RBI executive directors in charge of the urban banks department to ask if the claim was true and if not, what action was being planned by it. As expected, there was no response from the RBI. 
     
    Meanwhile, whistle-blowers of BMC Bank who had filed a public interest litigation (PIL) in the Bombay High Court, say that this claim is completely false and they are in the process of filing a complaint against the lender. It may be recalled in this case, an order by the Bombay HC, asking the Central Registrar of Cooperative Societies did not led to any action to safeguard depositors. 
     
    BMCB, one of the oldest, multi-state minority cooperative banks, has faced only mild actions from the RBI in the past. Such is the lethargy when it comes to their regulation and supervision that even letters from members of parliament (MPs) leave regulators and the government unmoved. 
     
    Two MPs from Shiv Sena, Anand Rao Adsul and Gajanan Kirtikar, had written to the RBI and former finance minister Arun Jaitley, and the central registrar, in August 2017 about BMC Bank. 
     
    In a letter to the RBI deputy governor on 16th August, Mr Kirtikar has expressed surprise at RBI’s lack of action, when its own inquiry has established embezzlement of funds by the chairman Zeeshan Mehndi. 
     
    He had, among other things, drawn attention to two shell companies—Shah Traders and Universal Enterprises, which were used to route loans to the directors. The same chairman has now issued the advertisement claiming an endorsement by the RBI. 
     
     
    Here are some of the issues raised by whistleblowers inside the bank in their PIL:
     
    • A Rs540-million bank guarantee given against six allegedly fake FD receipts of Rs90 million each;
    • Loans sanctioned to those close to the directors have gone bad;
    • Evergreening of bad loans by sanctioning fresh loans without security or fake documents;
    • Sanction of loans by the managing director, without the board’s permission, far in excess of his power;
    • Investment of Employees Provident Fund money in unlisted companies, violating norms PF norms;
    • Illegal transfer of tenancy rights of the bank properties;
    • No provision for gratuity and leave fare concessions in the balance sheet in some years, in order to show cash profits;
    • Bogus loans sanctioned against fake documents. These loans were then transferred to nationalised banks and later classified as non-performing.
     
    Moneylife has written to Bombay Mercantile Coop Bank seeking a response to our queries about the RBI endorsement. If the bank replies, this article will be updated with details. 
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    COMMENTS

    Harish

    2 weeks ago

    Moneylife is doing a great job. Moneylife should also try to raise public opinion about making RBI at least respond to the letters written to it.

    Nagaraju Bommanahalli

    2 weeks ago

    In India nobody knows how Indian companies are doing fraud from the beginning to last ,for example a big business men will start the company in India as below .His companies actual value is Rs2000crores but with the help of the auditors,Banks,and chartered accountants he made his company s values to RS 6000 crores by book adjustment with bribe and he call IPO that is in share market and collect Rs10000 crores in share market, first he pumped 60%of money to foreign country in the name of business and will deposit most of the money in his name next he will file bankruptcy due to losses and will write off all the loans this is the business doing in India ED is doing drama ICICI Bank chandakochar is well known to all she done huge fraud in ICICI Bank, this drama of enquire is doing from past one year, but still she is not arrested, reasons In this icici bank scam all SEBI auditors ED RBI central government rating agencies big leaders of all parties involved.central government making all efforts to avoid arrest these fellows,if arrested all all foreign country become knows most of the Indian companies running on bogus and take away all foreign investment,then India become bankruptcy.This is well known by central government hence avoiding all efforts to arrest directors of icici bank chandakochar DHFL jetairways Videocon kingfisher airline PNB bank head [email protected] etc . wait in few months most of the common people investment in icici bank NBFC PSU banks equity NCD mutul funds become Zero, most of the banks gave huge fraud loans on bogus audited financial statement, only poor citizens losing their hard earned money,

    Raza Haider

    2 weeks ago

    https://youtu.be/hsy3pKLC-Hs

    Ramesh Poapt

    2 weeks ago

    'safe' word will be extinct soon!!

    Raza Haider

    2 weeks ago

    We the share holders of Bombay Mercantile coop Bank complaining and informing with day to day proof to RBI as well as Central Registrar Cooperative but no action has been taken against them Zeeshan mehdi chairman and Shah Alam looting the bank in all the way Zeeshan mehdi is will full defaulter 6 FIR at Lucknow and Allahabad registered against him he is absconding . RBI in its inspection report clearly admitt that he is defaulter fraud and many embazellemen done by him. He can not be even a director of the bank but still he is chairman. Recently he conducted the false ans illegal election of board of directore with the connivence with Returning Office Ashok kumar jain and elect directos in closed door election Many candidates and share holder reported the matter to RBI and CRC but they ignored what is reason behind this. Zeeshan mehdi. Arshad khan salauddin Razmi inspite of being defaulter NPA. Lots of cases registereg againt them They are illegal directors.Legal expenses in balance sheet increses Rs.5.68 crores in2010 from Rs 2.00 crores in the year 2018. All the expenses done mostly they spent in personal criminal cares.But RBI and CRC are deaf and dump. It is not faraway that the position of BMC bank became like PMC in near future.

    mahendra kumar

    2 weeks ago

    Regulatory control and compliance policy has to be reviewed on priority,

    bhaskar

    2 weeks ago

    "As expected, there was no response from the RBI." :)

    Ranbir Lamba

    2 weeks ago

    The loot is on
    Regulator + auditor + MP are sleeping joints

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