RBI appoints Kochi based firm to conduct audit on GTB

Kochi: Kochi: Varma & Varma, a Kochi-based firm, has been appointed by the Reserve Bank of India (RBI) to conduct a due diligence audit on the Global Trust Bank (GTB) to facilitate its merger with the Oriental Bank of Commerce (OBC).

Varma & Varma was assigned the job of independent auditor after Mumbai-based Chitale & Co quit within a few days of appointment following questions asked about its independent status. Chitale & Co had to quit as OBC's auditor for merger scheme after the role of Rajendra Chitale came into focus as he was a director of the Unit Trust of India when UTI bank took a decision to merge with GTB in 2001.

This merger had to be called off as it came to light that GTB had lent funds to scam accused Ketan Parekh to jack up prices so that a favourable swap ratio could be announced for GTB.

With various quarters like the Investors Grievances Forum crying foul over the independent status of Chitale & Co, the accounting firm had no other option than quitting as OBC's auditor.

Following this, the RBI assigned the job to Varma & Varma under Venugopal C.Govind. Sources said the mandate is to certify financial statements from the date of moratorium to the date of eventual merger.The report of the auditor will be presented to the RBI which will take a final decision on the merger of GTB with OBC. However, directors of Varma & Varma were not ready to comment on the development.