Reliance Capital case: NFRA debars two CAs for auditing lapses, imposes fine of up to Rs. 3 crore

The National Financial Reporting Authority (NFRA) has taken decisive action by debarring two Chartered Accountants (CAs) for a period ranging from 5 to 10 years, along with imposing fines of up to Rs. 3 crore on the involved parties. The case revolves around a financial transaction with Reliance Capital, with NFRA’s order dated April 12 outlining the penalties.

Notably, the NFRA has levied a monetary penalty of Rs. 3 crore on the audit firm M/s Pathak, H.D. & Associates. Additionally, fines of Rs. 1 crore and Rs. 50 lakh have been imposed on EP (Engagement Partner) CA Parimal Kumar Jha and EQCR (Engagement Quality Control Review Partner) CA Vishal D Shah, respectively. Furthermore, the order stipulates that the EP and EQCR partners are to be debarred for 10 and 5 years, respectively, from being appointed as an auditor or internal auditor, or from undertaking any audit pertaining to financial statements or internal audit functions and activities of any company or body corporate. These sanctions are set to become effective 30 days from the date of issuance.