BWI: Auditors Report Points out Anomalies in GHCL Accounts

Press release from Business Wire India
Source: GHCL Forum
Friday, May 29, 2009 06:35 PM IST (01:05 PM GMT)
Editors: General: Consumer interest, Economy, Law & justice; Business: Accounting & management consultancy services, Banking & financial services, Business services, Chemicals, Financial Analyst, Stock exchanges
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Auditors Report Points out Anomalies in GHCL Accounts
GHCL Forum stands Vindicated; Demands Promoter Dismissal

New Delhi, Delhi, India, Friday, May 29, 2009 -- (Business Wire India) -- GHCL minority shareholders who had come together under the banner of GHCL Forum stand vindicated today as the auditors of GHCL Ltd. (Gujarat Heavy Chemicals Ltd), Jayantilal Thakkar & Co, has pointed out the anomalies present in accounts submitted by GHCL. The auditors vide their limited review report has said that GHCL had not made provisions worth more than Rs. 1000 crores and have also not made provision for diminution and advances to subsidiaries.

Consequent to this, the company's net worth gets negative by an overwhelming Rs. 400 crores. The fact sheet had been on GHCL Forum website www.ghclforum.org.

Mr. Ashish Begwani, the Convener of GHCL Forum said, "The auditors report has vindicated our stand and this is the first victory for GHCL Forum in the pursuit of its objectives. We renew our demand for the dismissal of promoters and instituting a new and capable board."

The auditors report indicates that the corresponding quarter's and annual results are not comparable due to reclassification of foreign operations as non-integral operations amounting to a difference of Rs. 5,430 lakhs. The auditors have also pointed out that they have not made a provision for the diminution in the value of investment of Rs. 13,385 lakhs to the subsidiary companies.

Mr. Begwani says, "The auditors report also states that the board of GHCL has given an in-principle approval for financial restructuring. We are worried that the company has taken the decision because it's on way to bankruptcy stemming from the vested interest of its promoter Mr. Sanjay Dalmia and complete mismanagement in operations."

"The auditors report is curiously silent on the bogus profit of Rs. 239 crores shown by GHCL while the company was actually in losses. A further loss of Rs. 53 crores which the company had loaned for share buy from open market, has not been reflected yet. This is yet another instance of violation by the company as the company can't finance to buy its shares and consequently the company has to bear the loss, this is clear case where auditors conniving with promoters," he added.

Through GHCL Forum the shareholders want to assert their power as owners of the company to influence its behaviour. The shareholders are requesting the Ministry of Corporate Affairs' Serious Frauds Investigation Office (SFIO) to look into company's business immediately because of a fear that GHCL will go the Satyam way if the motives and actions of promoters are not checked immediately.

It is important to note that only those disclosures are made, which GHCL forum has claimed, based on information available on public domain, there is not a single instance where the company has come out with confessions.

Having this evidence of wrong doings and continued daring of the promoters, the GHCL Forum hope that some day, some body will wake up and whip up the errant promoters and the entire board of GHCL.


CONTACT DETAILS
T. Anand Mahesh, Mavcomm Consulting Pvt. Ltd., +91 9350266285, anand@mavcommconsulting.com

KEYWORDS
CONSUMER, ECONOMY, LAW, CONSULTANCY SERVICES, BANKING, BUSINESS SERVICES, CHEMICALS, Financial Analyst, STOCK EXCHANGES

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