The Bombay High Court has dismissed a petition filed by Amit Goenka, which competes with KPMG’s Securities and Exchange Board of India (SEBI) appointment as a forensic auditor to investigate the alleged fund at Shirpur Gold Refinery.
In its 2021 communication, SEBI, through 2020-2021, appointed KPMG Assurance and Consulting Services as Forensic Auditor to review the financial statements of Shirpur Gold Refinery Limited for the financial year 2018-2019. KPMG presented a report on March 2023.
Market regulator, an interim order dated 25 April 2023, accused of fund diversion of debt-affected Shirpur Gold. Goenka served as the non-executive chairman of the company in 2021-22.
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Justices Rajesh S. Patil and Chandrakar said in an order on Thursday, “We did not get any equitable reasons submitted by the petitioner (Amit Goonka) in the writ petition for the appointment of KPMG, in which Justice Rajesh S. Patil and Chandurkar said in an order on Thursday.
The High Court said that according to the Goenka Act, SEBI was free to advance the matter before SEBI.
SEBI’s interim order was indicated by a complaint in February 2021, alleging that loans taken by Shirpur Gold Refinery were not used to operate the company, but the companies were closed under Subhash Chandra’s control, Essel Group President Errites and his family. The complaint also alleged that Shirpur had failed to provide information about their operations to public shareholders, which leads SEBI to investigate the matter.
On 25 April 2023, Markets Regulator issued a show-causal notice cum interim order for manipulation of Amit Goenka, Shirpur Gold Refinery, and five others in alleged fraud practices and financial statements.
In his order, SEBI directed through his full -time member Ashwani Bhatia that institutions should not thin or sell their holdings in Shirpur. SEBI said that Shirpur had allegedly prepared a plan to remove funds from the debts within the promoter group.
“It seems that the main reason for the Lorest of Shirpur for the lenders is not non-acquired from its debtor. 404 crores. It seems that the promoters appear to be part of a well -designed plan designed by promoters to transfer funds from Shirpur and misuse the IBC process to their accounts, seem part of the plan designed by the promoters, ”Bhatia said in the order.
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Senior advocate Pradeep Sanchti, who represented Goenka, argued before the High Court that KPMG was disqualified to submit a forensic report as it did not meet the eligibility criteria set under SEBI’s tender.
He further stated that the KPMG report submitted on 21 March 2023 cannot be guided as a ‘forensic report’, taking into account the absence of a compulsory unique document Identification Number (UDIN) and KPMG was not listed as a registered firm with India’s Chartered Accountants (ICAI).
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On behalf of SEBI, senior advocate Mustafa doctor argued that if an adverse order was passed against Goenka, he had the option to appeal. The doctor insisted that the challenge for the appointment of Forensic Auditor was only a strategy to delay the proceedings, given that Goenka did not challenge the interim order, despite that it is a semi-judic order.
