KPMG probing ex company secy allegations: Kanoria

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KPMG probing ex company secy allegations: Kanoria

Speaking to CNBC-TV18, Hemant Kanoria, director of Viom and CMD of SREI said, the former company secretary has made the allegations to get back at the firm for firing him.

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Viom Networks, a venture between Tata Teleservices and SREI Group enterprise Quippo, has appointed KPMG to assess the extent of the graft, if any, after a former company secretary alleged that the Kanorias of the Srei Group diverted funds to the tune of Rs 300 crore to some private institutions.

Speaking to CNBC-TV18, Hemant Kanoria, director of Viom and CMD of SREI said, the former company secretary has made the allegations to get back at the firm for firing him.

Kanoria said KPMG will determine whether the allegations are true. "We have ordered audit in lieu of corporate governance," he said adding, "auditors will submit the report in four to six weeks."

Shares of SREI were under pressure in early morning trade at Rs 33.25, down 12%. 

Q: We are just asking you to react to these allegations that you have colluded with the CEO to siphon off money from the company that's been made by the company secretary and apparently there is a KPMG audit going on to probe that?

A: What had happened was that in the month of July, the company secretary was fired because of impropriety by the CEO. After he got fired, he started making allegations on various people in the organization and transactions. So our group, the Kanoria group and the Tata group felt that it was proper get the company audited by KPMG because he is raising all these kinds of false allegations. The company is continuously audited by E&Y, but we thought that it was good to get an audit by KPMG also and take their report because that is the normal process we carry out if there is a whistle blower who has blown a whistle rightly or wrongly. So we will basically appoint an auditor to do the audit because that is the standard which we have laid for corporate governance within the organization and that is the process which is being followed.

But you see, this person must have gone a little berserk in going out and saying various kinds of things. All normal transactions have been misconstrued by him as allegations of misappropriation because the company has taken action against him. So this must be his way of retaliating.

Therefore, as per the policy which is followed on corporate governance, we have appointed KPMG to carry out an audit. I don't think anything wrong has been done and the full process has been followed on corporate governance.

Q: Is this a stance that is supported by the Tata group, who are partners in this JV because the allegation seems to be specifically against the Kanorias? And how soon will we hear on what KPMG's observations are?

A: Well this was decided both by the Tata group and the Kanoria group when we received these allegations. We both were in sync when we decided to have this audit done because this is the policy on whistle blowing which the company has laid down from the corporate governance standards. There is a full buy in of hours because there has been nothing wrong done by us.

So therefore an audit has been appointed and they would be giving the report in about 4-6 weeks time. One the audit report is out, it will be discussed in the board and it will be discussed with the share holders. I don't think there is anything which is wrong, it has just been misconstrued and these allegations are baseless. This person has been fired by the CEO so this must be his way of retaliating.