NFRA : The National Financial Reporting Authority (NFRA) has slapped a Rs 2 crore fine on Deloitte Haskins & Sells LLP and two certified accountants for alleged audit errors at Zee Entertainment Enterprises Limited.
The Rs 2 crore charge relates to auditing errors in the fiscal years 2018-19 and 2019-20.
In addition to a Rs 10 lakh fine, chartered accountant AB Jani, the auditor’s Engagement Partner (EP), has reportedly been barred from taking on any audit work for 5 years, while Rakesh Sharma, the Engagement Quality Control and Compliance Review (EQCR) Partner, has reportedly been fined Rs 5 lakh and barred for 3 years.
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According to the financial watchdog, auditors appeared to have failed to execute their professional duties under both the Companies Act and the Standards on Auditing (SA).
A Deloitte representative confirmed in a statement that the business and two retired partners received the NFRA decision and that “we are currently reviewing the order to decide our next course of activity”.
NFRA investigation
The NFRA’s investigation indicated that the auditors were severely negligent, failing to exercise cautious professional judgment and due diligence.
The NFRA determined that they did not effectively examine management’s arguments and failed to evaluate the reporting of probable fraud.
In August of this year, ZEEL, Culver Max Entertainment Pvt. Ltd. (CMEPL), also known as Sony Pictures Networks India (SPNI), and its group company Bangla Entertainment Pvt. Ltd. (BEPL) reached a comprehensive non-cash agreement that resolved all disputes related to the merger working together agreement and the combined scheme of structure peacefully.
In January of this year, Sony Pictures Networks India (SPNI) called off a proposed $10 billion merger with Zee Entertainment, canceling the December 2021 deal. Sony reportedly wanted a $90 million termination fee in response to Zee Entertainment’s alleged breach of the merger agreement.
On May 23, Zee sought a $90 million termination fee from SPNI and its subsidiary Bangla Entertainment Pvt. Ltd. (BEPL) for withdrawing from the $10 billion merger.
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