IndusInd Bank has appointed Grant Thornton to conduct a forensic review into accounting lapses detected this month and to check if there is any evidence of fraud or internal misstatements, said two people with direct knowledge of the matter.
IndusInd is India's fifth-largest private lender with a balance sheet of $63 billion. Its shares have lost about 23.4% since it disclosed on March 10 that its derivatives portfolio was overvalued by around 2.35%, or $175 million, after non-compliant internal trades.
The accounting discrepancy contravened Reserve Bank of India rules, though the central bank has said IndusInd is well-capitalised.
IndusInd on Thursday told stock exchanges it had appointed an unnamed firm to identify the root cause of the problem and identify lapses, but it did not say that would include checks related to any potential fraudulent transactions.
The two sources said on Sunday that Grant Thornton was the firm appointed and its extensive forensic review would include assessment of any evidence that indicates fraud in the transactions. They declined to be named as the matter is confidential.
The first source added Grant Thornton would also assign accountability to individuals who were responsible for the lapses, and review the accounting treatment of all derivative contracts.
The source added Grant Thornton would also assess if there were any intentional misstatements internally related to the transactions.
IndusInd and Grant Thornton did not respond to Reuters' requests for comment.
Reuters reported last week that the Reserve Bank of India had urged the CEO of IndusInd Bank and his deputy to step down as soon as replacements were found due to the significant accounting lapses. IndusInd Bank, however, strongly denied the claims, stating they were "factually incorrect."
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