ICAI finds 2 Lovelock & Lewes members guilty in Global Trust case

MUMBAI: Initial investigations by the disciplinary committee of the Institute of Chartered Accountants of India (ICAI) found two members of auditing firm Lovelock & Lewes guilty of professional misconduct in the five-year old case pertaining to the Hyderabad-based Global Trust Bank.

Lovelock & Lewes is a member firm of PriceWaterhouseCoopers, which is also being investigated for its role in the Satyam fraud.

ICAI is yet to conduct a final investigation into the GTB case for the three years under review, 2000-01, 2001-02 and 2002-03. While Lovelock & Lewes did the audit in the first two years, PriceWaterhouseCoopers was the audit firm in the third year.

When contacted, ICAI���s newly-elected president Uttam Prakash Agarwal told ET: ���I am informed by the institute���s disciplinary committee that two out of the three members being investigated are guilty of professional misconduct.
However, the committee only looked into two audit years and sent its report to the central council, which will take the final call.���

The council will make its recommendations after completion of the entire investigations and thereafter submit a report to the high court, which will ultimately decide on the auditors.

Reacting to the development, an official spokesperson of Lovelock & Lewes said: ���Neither are any of the partners concerned with the audit of GTB nor has the audit firm recently received any communication from ICAI on the GTB matter. Therefore, it would not be appropriate to comment on pending proceedings.���

The Reserve Bank of India had complained to ICAI in 2004 after finding differences in its own numbers on GTB and the financial statements given by the bank���s audit firm. GTB was later found to be involved in the Ketan Parekh scam.

After RBI���s complaint, ICAI initiated proceedings against two Lovelock & Lewes partners, S Gopalkrishnan, who also signed on the Satyam balance sheet and KC Vacha. The disciplinary committee���s notice to the two members focussed on irregularities in the audits of GTB branches and procedural lapses.