Srei Equipment Finance's auditor Haribhakti resigns from immediate effect

In a letter to administrator of Srei Equipment Finance, Haribhakti cited RBI guidelines for the appointment of statutory central auditors /statutory auditors of commercial banks

Srei Equipment Finance (SEFL) auditor, Haribhakti & Co LLP, has resigned with effect from July 7, 2022.

In a stock exchange filing on Thursday, Srei Infrastructure Finance (SIFL), a listed company, had informed about the resignation of SEFL’s auditor. SEFL is a wholly-owned subsidiary of SIFL.

Haribhakti was appointed statutory auditors of SEFL from FY20 to FY24 at the 14th annual general meeting (AGM) of the company held on August 25, 2020.

In a letter to the administrator of SEFL, Haribhakti cited the Reserve Bank of India (RBI) guidelines for the appointment of statutory central auditors (SCAs)/statutory auditors (SAs) of commercial banks.

This restricted the tenure for appointment of statutory auditors to a maximum of three years. It is subject to the audit firm satisfying the eligibility norms each year.

“On completion of the audit for the financial year ended March 31, 2022, our firm has completed the tenure of three years in accordance with the guidelines.

Owing to some unavoidable circumstances, we will not be able to continue as the statutory auditors of the company till the conclusion of the annual general meeting in relation to the financial year ended March 31, 2022,” the letter read.

The auditor’s three-year term would have ended at the conclusion of the AGM. However, the resignation is with effect from July 7, 2022.

On October 12, 2021, the RBI had barred chartered accountancy firm Haribhakti from taking any audit assignment of entities regulated by it for two years. The order was effective from April 1. The audit firm failed to comply with RBI’s specific direction issued pertaining to statutory audit of a systemically-important non-banking financial company, RBI said.