Future Lifestyle Resolution is hampered by the role of the forensic auditor

22 Aug 2023 , 01:57 PM

News reports claim that a conflict of interest between promoter Kishore Biyani and the forensic auditor chosen by lenders has prevented the sale of Future Lifestyle Fashions (FLFL) under the corporate insolvency procedure. 

Before FLFL was accepted for corporate insolvency, Dilip Dixit had taken on a project for one of the Biyani-promoted businesses. Dixit is a partner at GD Apte & Co, the company that FLFL’s lenders hired to serve as their forensic auditor in July 2022.

In his petition, Biyani claims that this has led to a conflict of interest. On August 11, a division bench of the Bombay High Court decided that neither Dixit nor GD Apte & Co should act as FLFL’s forensic auditor. For the purpose of hastening the sale of the company under corporate insolvency, lenders are currently planning to select a new forensic auditor. 

There is no question of hiding any such data from the lenders, according to GD Apte & Co’s response to an ET query that they have ‘suo-moto declined the assignment as forensic auditors of FLFL’ and denied any conflict of interest.

GD Apte & Co. has been hired by the State Bank of India (SBI) to conduct a forensic audit of Future Consumer, the business disclosed to exchanges on May 23. Due to a conflict of interest, Future Consumer’s lenders may request that they leave their position as forensic auditors.

According to disclosures made by the RP, KPMG-supported resolution specialist Ravi Sethia has admitted Rs 2,117 crore claims from financial creditors against FLFL. SBI has filed the highest claim, totaling Rs 467 crore.

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