NFRA slaps Rs 1.10 crore fine on three entities in Coffee Day Enterprises subsidiary matter

economictimes.indiatimes.com:

TDL), a subsidiary of Coffee Day Enterprises Ltd. Besides, the auditing firm — Sundaresha & Associates — and the two auditors — C Ramesh and Chaitanya G Deshpande — have been barred from taking up auditing work for varying periods.

The case pertains to the diversion of funds worth Rs 3,535 crore from seven subsidiary companies of Coffee Day Enterprises Ltd (CDEL), a listed company, to Mysore Amalgamated Coffee Estate Ltd (MACEL).NFRA has found lapses in auditing of the books of TDL for 2019-20. The regulator said it has taken a stern action against the three entities for professional misconduct and failure to report irregularities in the company's books in 2019-20, despite having access to the details of an investigation that was ordered following the death of the company's chairman VG Sidhartha in July 2019.

MACEL is an entity owned and controlled by the promoters of CDEL while TDL is a subsidiary of CDEL. In its 36-page order passed on Friday, NFRA slapped a penalty of Rs 1 crore on Sundaresha & Associates and Rs 5 lakh each on C Ramesh and Chaitanya G Deshpande.

NFRA started a probe into the professional conduct of TDL's statutory auditors after capital market regulator Sebi shared its investigation report in April 2022 While the audit firm has been barred for a period of four years, the individual auditors have been restrained for a period of five years each. The prohibition period of Sundaresha & Associates and C Ramesh will run concurrently along with debarment imposed by the regulator through its two orders passed in April and May in the case of TDL for 2018-19 and in case of GVIL for 2019-20.