Business

Auditors pulled up

MUMBAI MAY 8. The Maharashtra Co-operation Department has pulled up auditors of Osmanabad and Wardha district central co-operative banks for their failure to notice discrepancies in investments in government securities (G-secs) even as it was awaiting a full report of the probe into gilt investments by co-operative banks.

Notices have been served upon auditors of Osmanabad and Wardha banks, which lost Rs. 30 crores and Rs. 25 crores respectively in the G-secs scam involving Home Trade and other brokers, for dereliction of their duties, the State government sources told PTI here today.

"The auditors are supposed to conduct a continuous and concurrent audit of the bank dealings and should have detected the irregularities in G-secs transactions in the normal course,'' sources said.

Meanwhile, in a notice to the Bombay Stock Exchange, Television 18 India said Home Trade owes Rs. 1.75 crores to various TV 18 group companies and provision to that extent would be made in books of respective entities in 2001-02.

TV 18 reiterated that even though it was holding post dated cheques for a part of the above outstanding and would make every effort to recover the dues, the provisioning was being done as a measure of abundant caution and accounting practice.

State government sources said in case of Nagpur DCCB, which lost Rs. 150 crores, the board itself had delayed providing the information to its auditors.

The Nagpur Bank board had passed a resolution vesting all powers in the chairman, Sunil Kedar, a prominent NCP leader from Vidarbha.

Referring to the Chinchwad-based Satguru Jangli Maharaj Co-operative Bank, the first urban co-operative bank against which the RBI initiated action for involvement in the multi-crore scam, the government sources said audit for UCBs was conducted on an annual basis. The bank boards of all these four banks have been superceded and administrators appointed.

On the probe of all 600 odd co-operative banks in Maharashtra, the report is expected by this week-end, sources added.

The sources were of the view that if the average exposure of a co-operative bank in G-secs was pegged at Rs. 3 crores the total would come to Rs. 2,000 crores and majority of the banks might not have violated the RBI norms.

"We may also ask co-operative banks not to go through brokers but it will take some time to opt for such a move,'' they said.

Referring to the four banks, whose boards have been superceded and administrators appointed, the sources said the focus would be on providing liquidity to them in case they see a run on their deposits.

"We may sell the securities registered in the Subsidiary General Ledger account and also tap resources from the Maharashtra State Co-operative Bank,'' they added.

Administrator for Wardha Bank

NAGPUR, MAY 8. The Commissionerate of Co-operation has dissolved the board of directors of Wardha District Central Co-operative Bank and appointed M. L. Chutke, district auditor of Department of Co-operation, as administrator.

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