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TMI Blog2021 (8) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... ditors Report will helpful to decide the veracity of the allegations of Oppression, Mismanagement and Financial irregularities. The Independent Chairperson Mr. E. Selvaraj is directed to appoint a Forensic Accountant before 20th August, 2021 for conducting a Forensic Audit for the Financial Years 2017-18 to 2020-21, in respect of the affairs and accounts of the Respondent Company. The Forensic Accountant shall submit the Report in a sealed cover to the Appellate Tribunal, within a period of three months from the date of appointment. The fees of the Forensic Accountant shall be borne by the Company. Application allowed. - I.A. No. 2313 of 2020 in COMPANY APPEAL (AT) No. 77 of 2019 - - - Dated:- 3-8-2021 - [Justice Jarat Kumar Jain] Member (Judicial) And [Ms. Shreesha Merla] Member (Technical) For the Appellants : Mr. Naveen R. Nath and Mr. Rahul Jain, Advocates For the Respondents : Mr. Krishnan Venugopal, Sr. Advocate alongwith Mr. Abir Phukan, Mr. Surya Prakash, Mr. Shivendra Singh and Mr. Ashkrit Tiwari, Advocates for R-5 ORDER [ Per; Shreesha Merla, Member (T) ] The Appellants/Applicants in I.A. 2313 of 2020, Dr. Joe Verghese, Dr. R. L. Kamath and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he bill amount has not been credited to the Hospital account. c) that there is selective billing that is the Revenue going to the Cathlab account owned by Dr. K. Mukund is meticulously collected, whereas the revenue due to the Hospital is either reduced or omitted under the orders of Dr. K. Mukund or Mr. Bhardwaj. (iv) Two different versions of audited Balance Sheet and Profit and Loss Account for the same accounting year 2017-18 were both signed by the Third Respondent and the Second Respondent and each was presented in different Board Meetings. Both the versions show different figures with respect to the Administrative Expenses, Loss and Trade Receivables. (v) The Independent Auditor CA Rangannath Shenoy partner of A.K. Gopinath Shenoy Co., are also the Auditors of Dr. Mukund personal accounts since several years and therefore the fraud committed was never informed to the concerned authority by the Independent Auditor. (vi) Only Forensic Audit ordered for the Financial Year 2017-18 and for the subsequent years, would bring to light the financial irregularities. It is stated that the management had earlier destroyed the computer data which is evident from the Repo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upervision of Independent Chairman E. Selvaraj who replaced Mr. Amirulla Millath and submitted the reports to CLB, Chennai. b. All the Financial Statements of the Respondent Company are in public domain and are prepared, audited and filed by CLB appointed Independent Chairmen and Chartered Accountants. c. NCLT, Bengaluru did not make any mention about the financial irregularities or siphoning of funds of the Company. All the allegations in this Application were part of the pleadings before the NCLT and as the Appeal is ripe for final hearing only to delay the matter, this Application has been filed. d. The Fifth Respondent Dr. Jayakrishnan has changed sides and is now colluding with the Appellants and is not co-operating with the day to day affairs of the Company and is interfering with the smooth functioning of the First Respondent Company, while Dr. K. Mukund is contributing his entire time to the Hospital. The Appellants including the Fifth Respondent, are working in bigger institutions and in their own clinics. The main source of revenue is the hard work of the Second Respondent and the situation has been so, for the last 10 years. e. The Forensic Audit will di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the Second Respondent is the Chief Financial Advisor of the Company. (ii) The Statutory Audit of the past years cannot be an answer as the Audit itself has thrown up more questions than answers. There is a fundamental difference between Statutory Audit and a Forensic Audit which is for the purpose of exposing fraud, misfeasance and malfeasance committed by an organization. (iii) It is denied that the Fifth Respondent is colluding with the Appellants. The group of shareholders of the Company led by Dr. Mukund undermined the interest of the Company and indulged in gross mismanagement and the findings rendered in various Statutory and Internal Audits establish these allegations. (iv) The submissions by Respondent Nos. 1, 3 and 2, 4, 6 7 that the ongoing Audit would be disturbed if a Forensic Audit is directed, reflects the indifference of the Respondents towards the Management of the Company. Learned Counsel submitted that the Forensic Audit would in fact help in confirming the fraud and malfeasance in the Management of the Company. (v) A prima facie case was found by the NCLT for directing the RoC to take appropriate action against the Company. In fact, the action ..... X X X X Extracts X X X X X X X X Extracts X X X X
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