Deloitte Resigns As Statutory Auditor Of DHFL
Deloitte Haskins & Sells LLP quit as the statutory auditor of Dewan Housing Finance Corporation Ltd. citing doubt about the mortgage lender’s ability to stay as a “going concern” and other observations that could have a material impact on its financial statements.
Deloitte cited discussion with Kapil Wadhawan, chairman and managing director of DHFL, on July 29, and referred to the matters it stated in the “disclaimer of opinion” to the financial statement for the year ended March 31, 2019, according to the Aug. 2 resignation letter filed with the Ministry of Corporate Affairs.
“Our firm’s policy on client acceptance and continuation do not permit us to continue as statutory auditors of the company,” Deloitte said.
DHFL informed the exchanges on Tuesday about the resignation, saying it is in discussion with audit firms for appointment as statutory auditor.
DHFL, with a debt of nearly Rs 98,200 crore, reported a loss of Rs 2,223 crore in the quarter ended March 31, 2019. The joint auditors of the company—Deloitte Haskins & Sells LLP and Chaturvedi & Shah LLP—raised significant doubts on its going concern status and listed six qualifications, of which at least three have a material impact on the financial statements. These included:
- Significant deficiencies in the grant and rollover of Rs 5,652 crore of inter-corporate deposits.
- Lack of sufficient information and explanations regarding credit, legal and technical evaluation and evidence for end-use monitoring of loans worth nearly Rs 24,000 crore.
- Use of deferred tax credit to cut losses.