Chitale quits as OBC auditor of GTB

The Global Trust Bank merger controversy has taken a curious turn. Auditing firm Rajendra Chitale of Chitale & Co, the ‘independent&#14...

The Global Trust Bank merger controversy has taken a curious turn. Auditing firm Rajendra Chitale of Chitale & Co, the ‘independent’ auditor appointed by Oriental Bank of Commerce, to conduct a due diligence on GTB has decided to quit within days of his appointment.

Verma & Verma, another Mumbai-based chartered accountancy firm, will replace Chitale as the independent auditor to conduct the due diligence for OBC. The report of the auditor will be presented to RBI which will take a final decision on GTB’s merger with OBC.

A senior RBI official also confirmed that Chitale has quit as OBC’s auditor to the merger scheme.

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The mandate of Chitale was to certify the financial statement from the date of the moratorium to the date of eventual merger. Chitale’s role came into sharp focus as he was a Director of Unit Trust of India when UTI Bank took a disastrous decision to merge with GTB in 2001.

The merger had to be called off as it came to light that GTB had lent generous funds to 2001 stock scam accused Ketan Parekh to jack up its share price so that a favourable swap ratio for GTB can be announced.

The role of UTI directors was severely castigated by various investor bodies for failing to protect UTI Bank’s shareholders’ interest. Due to the controversy, the RBI had directed UTI Bank to scrap the merger proposal with GTB.

RBI has earlier announced Chitale as ‘independent’ auditor to GTB at the time of the moratorium. ‘‘How can any auditor be called independent when he was associated with the bank earlier. It was a clear case of conflict of interest,’’ President of Investors Grievances Forum, Kirit Somaiya said.

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