Mangalagiri (Andhra Pradesh), Mar 30 (PTI) The Andhra Pradesh Police CID has arrested a chartered accountant for “abandoning due diligence and due process” in certifying the annual financial statements of Margadarsi Chit Funds Pvt Ltd (MCFPL), an official said on Thursday.
Police arrested Kudaravalli Shravan (44), partner of Brahmayya & Co on Wednesday and seized his laptop along with some records from his possession.
“Shravan admitted he had not done due diligence and, without following due process of verification of the branch-level financial statements or bank statements, he had certified the annual financial statements of MCFPL,” CID chief and Additional Director General of Police (ADGP) N Sanjay said in a statement.
He said these developments had cast a shadow on the annual reports (including the cash reserves) submitted by MCFPL to the Registrar of Chits.
The senior IPS officer noted that the principles of auditing had been ignored at various levels by the accused, especially when it came to financial statements and bank balances, both current and fixed deposits.
The auditor had failed to provide confirmation of balances in banks, ADGP Sanjay said, and when confronted with evidence procured from the financial institutions, the auditor could not explain the balances of fixed deposits which had been inflated by a few hundreds of crores of rupees.
Police produced Shravan before the Third Additional Chief Metropolitan Magistrate in Vijayawada on Thursday, who has sent him to judicial remand for 14 days.
Recently, the CID registered multiple FIRs against Margadarsi for a string of alleged irregularities, including diversion of depositors’ money into mutual funds and speculative markets for personal gain. The CID also arrested some employees of the company. PTI STH ANE STH 3/14/2023 SS
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