Atlas Jewellery’s auditors resign over corporate governance issue

The auditors Tarun Kandhari & Co said that their letter, dated June 7, 2023, should be treated as their formal resignation letter

Auditors of Atlas Jewellery have resigned over corporate governance and regulatory-compliance concerns, according to an exchange filing from June 7.

Trading in the stock has been suspended due to penal reasons, according to the BSE.

In the resignation letter, the auditors Tarun Kandhari & Co submitted, they said that their appointment as Statutory Auditor was for a period of one year (FY2021- 22), commencing from the conclusion of the thirty-first Annual General Meeting (AGM) until the conclusion of the thirty-second AGM, which was scheduled to be held in the year 2022.

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“However, due to the prevailing circumstances within the company, the AGM could not be conducted, and to date, no clarification has been provided regarding its status,” they wrote.

“Additionally, it has come to our attention that there is an imbalanced Board and absence of an audit committee within the company, which raises concerns regarding corporate governance and regulatory compliance,” they added in the letter addressed to the Board of Atlas Jewellery.

Considering these and “the uncertainty surrounding the company's governance structure”, the auditors stated that they are no longer willing to continue as the Statutory Auditor of the Company.

Atlas Jewellery has also informed the exchange, through the filing that submitted the auditor’s resignation letter, that it has no “valid Board or Audit Committee”.

The limited review/ audit report, which is issued by an auditor after every quarter, has been pending since June 2022 quarter.

“Since the Company presently has no valid Board or Audit Committee, the same could not be placed before the Board/Audit Committee as the case may be,” the company’s filing stated.

The auditors Tarun Kandhari & Co said that their letter, dated June 7, 2023, should be treated as their formal resignation letter with immediate effect.

“It would be appreciated if you could acknowledge receipt of this letter and update the necessary authorities as per the legal requirements. We shall also be informing the concerned ROC by filing the requisite e-form ADT-3.”

Under Rule 8 of Companies (Audit and Auditors) Rules 2014, when an auditor resigns from a company, he/she/entity has to file a statement in Form ADT-3. The Form that includes various details including reasons for resignation and any other facts relevant to the resignation.
The auditors have informed the Board that they will be available for any assistance during this transition period. They wrote, “Should you require any assistance or additional information during the transition period, please feel free to reach out to us”.