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The Institute of Chartered Accountants of India (ICAI) has formed a partnership with the Securities and Exchange Board of India (SEBI) to detect corporate frauds, following the discovery of financial irregularities at IndusInd Bank and Gensol Engineering. Under the proposed agreement, the ICAI will prepare a working paper to explore potential areas where the two organisations can collaborate. Charanjot Singh Nanda, the president of ICAI, explained on Saturday that a research group would be formed within ICAI to identify areas where meaningful discussions with SEBI could take place. He emphasised that India is a favourable investment destination, and it is crucial for SEBI to ensure the safety of investments. As the regulator for accounting, SEBI aims to involve ICAI in creating an environment that helps reduce fraud.

The Financial Reporting Review Board (FRRB) at ICAI announced last week that it was reviewing the financial statements and statutory auditor鈥檚 report of Gensol Engineering and its affiliate, BluSmart Mobility. Nanda mentioned that the review was expected to be completed within the next six months. FRRB officials confirmed that the review process would be a thorough, three-tier exercise.

Before ICAI's decision, the Ministry of Corporate Affairs (MCA) had stated that it was reviewing SEBI's interim order against Gensol Engineering concerning alleged fund diversion and forged documents.

Gensol's fraud came to the market regulator's attention in 2024 when SEBI received a complaint related to share price manipulation and fund diversion within the company. In mid-April, SEBI issued an interim order that prohibited the promoters of Gensol, Anmol Singh Jaggi and Puneet Singh Jaggi, from holding key managerial positions and from dealing in the securities market.

Additionally, the ICAI president shared that the institute is also working on the financial aspects of the 'One nation, one election' proposal, which is currently under consideration.

News source: Financial Express