“We were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on the statement,” said Deloitte Haskin & Sells and Mumbai-based Chaturvedi & Shah, the two firms responsible for auditing India’s Dewan Housing Finance Corp Ltd (DHFL).
“We are unable to comment on the company’s compliance of the covenants in respect of all borrowings and (the) consequential implications,” the auditors added.
DHFL is one of India’s largest housing finance companies but is grappling with debts totalling close to INR 1trn ($14.52 billion).
The Mumbai-based group had also faced claims of fraud and improper lending which had surfaced in January this year. An investigation by an independent firm of accountants found that loan monitoring had indeed been inadequate but otherwise gave the firm a qualified clean bill of health. DHFL said it is undertaking fresh valuation in respect of the loans including underlying securities that were a subject matter of the allegations, adding that any necessary adjustments to the carrying values of the loans would be made after this process had been completed.
The financial services group finally filed its audited results for Q1 2019 on 22 July. However, DHFL’s auditors raised several issues over the accounts and noted ‘material uncertainty’ regarding its ability to continue as a going concern, saying: “The ability of the company to continue as a going concern inter alia is dependent upon its ability to monetize its assets, secure funding from the bankers or investors, restructure its liabilities and recommence its operations, which are not wholly within control of the company.”
