Yes Bank faces fresh audit over whistleblower complaints: Mint report

The findings of the special audit may not have any direct impact on the audited financial figures of Yes Bank, the statutory auditor has said.
Yes Bank faces fresh audit over whistleblower complaints: Mint report
Yes Bank faces fresh audit over whistleblower complaints: Mint report
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The management at Yes Bank seems to be battling on several fronts. While the financial stability in terms of the capital adequacy ratio is keeping it busy trying to find investors, there are still complaints of lack of discretion while handing out loans. A whistleblower complaint is now expected to be looked into by a fresh audit following a decision by the statutory auditor of the bank BSR& Co.

The complaint by the whistleblower relates to certain transactions carried out when Rana Kapoor was still at the bank’s helm. The complaint was received more than a year back, in September 2018 and the allegation was that there were transactions where conflict of interest can be cited as well as cases where bad loans were not classified as such. The audit committee of the bank had ordered an investigation through special audit which was done by JLN US & Co. The audit was inconclusive and that is the reason for this fresh audit being recommended.

The specific complaint by the whistleblower is that certain loans though irregular were not classified as such and the borrowers in these cases were somehow related to the founder and his relatives. The founder Rana Kapoor’s family office Three Sisters is said to be in the middle of this controversial deal. The whistleblower just left the hints and wanted a more elaborate enquiry to bring out the facts.

There is now a demand that the directors of Yes Bank be changed following the change in the shareholding pattern. Quite a bit of promoters’ quota shares has been liquidated by some of the promoter entities though Rana Kapoor personally is holding on to some. The special audit team could reach a conclusion that there were some leads and hints that things were not perfect. However, they could not lay hands on any decisive proof to nail the complaints. The only information that can be shared is that the transactions related to the real estate companies. The special audit team had limited access to details from the entities outside the bank. Therefore, they could not conclude.

The other issue flagged by the whistleblower and confirmed by the special audit relates to payout to some senior employees at the bank. These include Lata Dave, executive assistant to Rana Kapoor; Amit Shah, former group president and head of marketing and communication; Rajat Monga, former senior group president and chief financial officer and Ashish Agarwal, former chief risk officer.

The findings of the special audit may not have any direct impact on the audited financial figures of Yes Bank, the statutory auditor has said.

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