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BDO confirms appointment by PNB to audit 5 Nirav Modi companies

The Economic Times |

01 March 2018

BDO, the Belgium-based audit firm, officially confirmed in an emailed response to ET on Wednesday that Punjab National Bank had appointed it to conduct a forensic audit of five Nirav Modi group companies — Firestar Diamond, Firestar International, Solar Export, Stellar Diamonds and Diamond R Us.

ET reported on February 28 that Punjab National Bank had issued a formal appointment letter to BDO on February 27 to conduct a multi-jurisdictional probe into the alleged fraud. Jeweller Nirav Modi, his uncle Mehul Choksi and their companies have been accused of defrauding the bank of Rs 12,622 crore.

BDO will conduct a forensic audit of the books of all the five entities for a period of seven financial years starting FY11, ET had reported. The scope of work also entails identifying how the letter of undertaking (LoU) mechanism was misused by Modi, gathering evidence of the money trail and the end-use of the funds raised through the instrument, besides quantifying the losses the bank suffered due to the alleged scam.

“It shall be our endeavour to exercise every bit of diligence in executing this assignment, given its sheer scale and complexity. It will be our responsibility to deliver the same within the required time frame in the larger national interest and that of banking industry, in particular,” Kartik Radia, partner and head, risk and advisory services at BDO, said in the emailed response to ET. BDO was chosen from four auditors invited to bid to conduct the audit.

PwC was the lowest bidder but lost out to BDO, which made the secondlowest offer. KPMG and EY were the others, ET reported on February 28.

Source: https://economictimes.indiatimes.com/industry/banking/finance/banking/pnb-appoints-a-forensic-auditor-for-nirav-modi-fraud-case/articleshow/63116712.cms