New Delhi: Discount retailer Subhiksha Trading Services Ltd has admitted it has yet to present audited accounts for the fiscal year 2007-08 to its board of directors.
“It is clarified that the accounts for the 12 months ended 31 March (2008) is audited and that the accounts for the extended year ended 30 June 2008 is pending finalization in view of the disturbed condition in the company affecting (the) ability of auditors to finalize this audit,” the company’s managing director R. Subramanian said in a statement on Monday.
Transparent firm? Subhiksha’s R. Subramanian says the accounts for the fiscal year ended 31 March 2008 have been audited. Harikrishna Katragadda / Mint
The disturbed condition refers to the financial crunch the company is facing because of which its operations have come to a standstill.
The issue of unaudited accounts figured prominently in the company’s board meeting in Mumbai on 22 November, and the board demanded an independent audit, said people close to the situation.
Four board members, including Renuka Ramnath and Rajeev Bakshi of ICICI Venture, Rama Bijapurkar and Kannan Srinivasan, quit over the issue, the people said. ICICI Venture holds 23% stake in Subhiksha and is the second largest stakeholder after Subramanian, who has a majority holding.
The company’s last independently audited accounts so far were for the fiscal year ending March 2007, according to the Registrar of Companies’ documents, which were reviewed by Mint.
The board had also raised questions on Subhiksha’s governance practices in the November meeting.
In Monday’s statement, Subramanian said Subhiksha has been practising “high corporate governance and transparency mode under the strict control of ICICI Venture”. He argued that while ICICI Venture was a minority stakeholder, it acquired “a certain set of domination rights” that included the “right to appoint majority on the board of Subhiksha, the right to control all aspects of the functioning of the company, including the appointment and removal of all senior management personnel, and the right to control the financial affairs by ensuring that the auditors were appointed by it and that the audit committee and all budgets were approved by it”.
ICICI Venture has sent a letter to the Chennai office of the the Registrar of Companies’ asking for an independent audit of Subhiksha’s accounts.
Subramanian said he is “not aware” of any such letter. A spokesperson for ICICI Venture declined to comment.