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.