IndusInd Bank reported its first quarterly loss in nearly 20 years this week amid continued upheaval over a major ‘accounting discrepancy’. The lender had disclosed in March that years of incorrect accounting of internal derivative trades led to a $230 million hit to its accounts for the financial year ended March 31. The Board has now raised the possibility of fraud involving ‘certain employees’ who had key roles in the accounting and financial reporting of the bank.
According to a regulatory filing, the bank has received investigation reports from its internal audit department as well as external firms regarding the accounting of internal derivative trades. This had “revealed the involvement of senior bank officials, including former key management personnel, in overriding key internal controls” and efforts to conceal the wrongful accounting practices from the Board and auditors.
“Board suspects the occurrence of fraud against the Bank and the involvement therein of certain employees having a significant role in the accounting and financial reporting of the Bank,” the company said in a statement on Wednesday.
It also said that the Board was in the process of taking “necessary steps to assess roles and responsibilities and
fixing staff accountability” in connection with the irregularities. IndusInd Bank is now working to determined the accountability of the people involved in the lapses and the possible legal actions that can be taken.
IndusInd Bank’s Rs 1,269 crore accounting error: Tracking the fallout since April 15