The National Financial Reporting Authority (NFRA) has imposed penalties on 18 auditors and also debarred them for varying periods for lapses with respect to audits of various branches of housing finance company DHFL.

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Penalties totalling Rs 18 lakh or Rs 1 lakh each has been imposed on the auditors for their professional misconduct, according to 18 separate orders passed by the regulator.

Also, they have been debarred for a period of six months to one year from "being appointed as an auditor or internal auditor or from undertaking any audit in respect of financial statements or internal audit of the functions and activities of any company or body corporate".

Out of the 18 auditors, 4 have been debarred for 6 months and the remaining 14 auditors have been restrained for 1 year.

Following media reports of alleged siphoning of public money of around Rs 31,000 crore and the Enforcement Directorate's reported action in April 2020 on an alleged banking fraud of about Rs 3,700 crore by the promoter/ directors of DHFL, the regulator suo-motu initiated an Audit Quality Review (AQR), as per the orders.

The review was to probe into the role of the Statutory Auditors of DHFL for FY 2017-18, the year in which the alleged fraud was primarily stated to have occurred, as per the NFRA orders dated September 29.

The NFRA's probe found that there were violations by these auditors in their roles as Engagement Partner (EP) in the audit of DHFL branches.

During the AQR, the watchdog also found that 33 EPs or branch auditors had signed the independent branch auditors report for nearly 250 branches of DHFL but none of the appointments of these EPs were approved at the company's annual general meeting.

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