ICAI and SEBI Join Hands to Combat Financial Fraud

The Institute of Chartered Accountants of India (ICAI) has joined hands with the Securities and Exchange Board of India (SEBI) to intensify efforts in detecting corporate fraud. This strategic move follows the surfacing of major financial irregularities involving IndusInd Bank and Gensol Engineering, prompting both regulatory bodies to enhance oversight mechanisms and investor protection.

Research Collaboration for Fraud Prevention

As part of this collaboration, ICAI will prepare a working paper that identifies potential areas of mutual cooperation with SEBI. “We will form a research group within ICAI to identify areas where ICAI can have a meaningful discussion with SEBI.

India is a favourable investment destination. It is important for SEBI to ensure that investments are safe. As a regulator for accounting, they always want to rope in ICAI so that we can together create an environment which can reduce the number of frauds,” said Charanjot Singh Nanda, president of ICAI. 

This initiative aims to align the oversight capabilities of both institutions to reinforce transparency and accountability across the corporate sector.

Ongoing Investigations into Gensol Engineering

The Financial Reporting Review Board (FRRB) at ICAI has announced that it is currently reviewing the financial statements and statutory auditors’ report of Gensol Engineering and its affiliate BluSmart Mobility. According to Nanda, this review is expected to be completed within the next six months. 

Officials from the FRRB have stated that the process involves a stringent, three-tier examination. This development comes in the wake of SEBI’s interim order issued in April 2024, which stemmed from allegations of fund diversion and manipulation of share prices at Gensol. 

The order restrains promoters Anmol Singh Jaggi and Puneet Singh Jaggi from holding any key managerial roles or dealing in the securities market. The Ministry of Corporate Affairs (MCA) has also initiated its own review of SEBI’s findings.

Read More: SEBI Cracks Down on Gensol Engineering Over Funds Misuse: Halts Stock Split

Conclusion

ICAI’s collaboration with SEBI marks a proactive step towards establishing stronger safeguards within India’s corporate ecosystem. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.