Banks Order Audit for Alok Industries


BENGALURU: Banks have ordered forensic audit of Alok Industries to recover a massive sum of 20,000 cr that the textile industry had borrowed along with its subsidiaries, reports Business Insider.

Headed by State Bank of India, the forensic audit will be conducted by lenders such as Grant Thornton and Chokshi & Chokshi to track the use of the loan by the textile pioneer. The forensic audit will calculate every penny of the loan amount and include legal findings of frauds and people involves in it.

The sudden resignation of Deloitte, the auditing firm that was taking care of Alok Industries finance position amidst the year was an unexpected scenario brought the financial circumstance to the limelight. SBI officials thus held a meeting to discuss the matter, confirms senior banker to Economic Times (ET).

The previous auditor of Alok industries, Deloitte did not comment on their financial case. They consider this as a client confidential matter which they won’t reveal. Though Deloitte has sanctioned a no-objection certificate to Shah Gupta & Co, the next chartered accountants firm taking over as auditors of Alok Industries.

“The reason for Deloitte's resignation was purely commercial in nature. The banks have never asked us for even a clarification thus far in this regard. There has never been any such mention in our accounts till date either. Besides, no auditor would take up the assignment if there were to be the existence of such a lacuna in the balance-sheet and even banks would not have supported us all the way they have so far,” said Surendra Jiwrajka, an executive director at Alok, told in ET’s interview.

For financial loopholes, Jiwrajka commented that banks never notified them about this financial glitch and demanded further clarification on this. The joint group of money lenders to the Mumbai textile firm is expected to meet this week for a final call on the audit issue. 

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