Canara Bank, which has been asked by the finance ministry to conduct forensic audit of the accounts of Hyderabad-based Deccan Chronicle Holdings (DCHL), will use the services of consultancy firm Deloitte.
According to sources, a Deloitte team has already approached the management of DCHL on behalf of Canara Bank for relevant information, but is yet to get access.
A top Canara Bank official said Deloitte was roped in to keep the audit process as transparent as possible.
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“It is not that the bank lacks the capability to conduct a forensic audit. Involving a third party is to make the process foolproof and transparent,” the official told Business Standard.
Choosing Deloitte for the job has its advantages, since it has handled the forensic audit of the erstwhile Hyderabad-based Satyam Computer Services after the scam-hit company was taken over by the Mahindra group. Besides, the firm has recruited a section of officials, including an ex-CBI official, for its forensic practice — all of them have worked on the Satyam case, said sources.
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The bank official, who declined to be named, said the audit process would take three to four months.
“Being the lead bank, we had to accept the responsibility of screening the accounts of DCHL and the lenders consortium had a consensus of opinion for such a step when the company management approached us for corporate debt restructuring,” said the official.
The official added it had become difficult to know the current status of accounts as DCHL got an extension of six months from the Registrar of Companies (RoC) to file the financial statement for the last financial year.
Most of the debt, estimated to be Rs 5,000 crore, was taken by the company towards working capital requirements through creation of multiple charges on its assets without lenders sharing information among themselves, particularly private banks, he said.