July 13 will be crucial for Dewan Housing Finance Corporation’s (DHFL) since the company’s financial results for the year 2018-19 would be ratified by the Board of Directors of the company. The company had earlier obtained permission to delay its results announcement by a fortnight. The company is passing through a critical phase following allegations of fund diversion and there is already a restructuring programme underway being supervised by a committee appointed by the lenders.
Meanwhile the interest in Saturday’s meeting is centred around speculations that DHFL’s two statutory auditors, Deloitte Haskins & Sells, and Chaturvedi & Shah may resign, according to a Business Standard report. Reports indicate that the auditors are not happy with the replies they received from the company’s management to the queries they had raised over the deployment of funds. Deloitte is yet to confirm that it is going to resign.
Statutory auditors need to inform the Securities and Exchange Board of India (SEBI) and the ministry of corporate affairs before they resign as auditors of listed companies. This year has already seen some high-profile statutory auditors’ resignations. Price Waterhouse & Co (PWC) resigned as auditors of Eveready Industries. It also resigned from Reliance Capital and Reliance Home Finance.
The issue of holding the auditors responsible for financial irregularities being revealed from balance sheets certified by them has assumed a lot of significance after the IL&FS scam hit headlines. The government has not taken it lightly and has directly and indirectly issued warnings to the audit bodies that they could be held responsible for certifying dubious balance sheets and account books.
DHFL has so far denied any wrongdoing. However, the meeting on July 13 will definitely be watched with enormous interest from all corners.