The Securities Appellate Tribunal (SAT) has stayed SEBI’s directive to Vijay Mallya-backed UB Holdings for re-stating the company’s accounts for two previous years.

The market regulator had asked the company to restate its financial accounts for FY13 and FY14, besides addressing the qualifications made in the reports by UB Holdings’ statutory auditors.

Providing details of its appeal to SAT against SEBI’s advice, UB Holdings said in the notes to accounts of its financial results that the appeal was made as the company had already carried out most of the required adjustments in its FY14 accounts.

The company stated that SEBI issued the directive despite its representation to the regulator. The SEBI directives have been stayed till the next date of hearing.

To enhance the quality of financial reporting, SEBI, in June 2012, had decided to review the present system of annual audit reports. It had decided to set up a Qualified Audit Review Committee (QARC), consisting of ICAI and exchanges to guide SEBI.

Listed companies are expected to submit their annual audited reports to stock exchanges, which are then referred to SEBI/QARC. In cases where the qualifications are significant and the explanation unsatisfactory, the company would be referred to ICAI’s Financial Reporting Review Board (FRRB). If the FRRB upholds that the qualifications are justified, SEBI will direct the company to restate its accounts and inform shareholders.

UB Holdings has been under scrutiny by various agencies for alleged irregularities in various group companies.

Last week, United Spirits said it received notices from the Ministry of Corporate Affairs and the I-T Department in relation to the alleged irregularities in loans given away by Vijay Mallya to other UB Group entities.

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