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| Sunday, 19 January 2003 |
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| News Business Features Editorial
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KPMG Ford Rhodes clears allegations KPMG Ford Rhodes Thornton and Company, the auditors to Pramuka has issued a statement saying that the last audited accounts issued for the bank were for the year ended March 31, 2001 which were released on August 30, 2001. Commenting on the allegations KPMG had not carried out a proper audit in respect of Pramuka Bank, the firm says: "These accounts were qualified in respect of the following a) Retention of provident fund contributions of Pramuka Bank employees within an internal private provident fund without approval from the concerned authorities. b) Improper accounting of interest income that should have been suspended. "We also drew attention in our audit report in respect of the following matters:- a) Absence of updated valuation reports in respect of properties obtained as security for loans. b) Investing of retiring gratuity monies of employees in an Employee Share Ownership Scheme. c) Exceeding limits specified by the Central Bank for equity investments. d) Exceeding limits specified by the Central Bank for owning immovable property. The accounts for March 31, 2001 also had extensive disclosures of related party transactions, including those with Pramuka Merchant Corporation. Management letters were addressed to the Board of Directors, conveying several matters of internal control weaknesses. The audit report relating to the accounts for the year March 31, 2002 has not been issued. KPMG concerns on this audit were discussed with both senior bank officials as well as Central Bank officials, details of which we are unable to disclose for confidentiality reasons. KPMG is firmly of the belief that we have carried out adequate work in respect of the above audit and have discharged our responsibilities accordingly. We stand by our work and report thereon." |
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