Search the Internet          Tips  Sites: Finance, Investment

'We lost faith in Kale,' says Ferguson

In a new twist to the controversy about a senior partner of A F Ferguson & Co quitting over the withdrawal of report on Tata Finance Ltd, the chartered accountancy firm on Thursday said it had "lost faith" in Y M Kale, author of the report on the finance company, and therefore he "ceased to be a partner" of the firm.

The 14 senior and former partners had three emergency sittings on July 20, August 5 and 6 following a meeting of the TFL chairman with the managing partner of Ferguson about inaccuracies in their report and conveyed they (Tatas) had "lost confidence in Kale, the partner-in-charge of this special assignment."

Ferguson, in a statement, further said the action against Kale was a unanimous opinion of all the partners.

In all the three meetings a number of issues relating to Kale's "past conduct emerged and he was also given an opportunity to present his views," the statement said.

"It needs to be unequivocally stressed that the firm would normally always stand by its partners," it added.

Efforts to contact Kale, who authored the TFL report going into alleged financial irregularities, proved futile.

Media reports about Tatas forcing the accountancy firm into asking Kale's resignation are, therefore, totally untrue, it said adding Kale's cessation from the partnership was in the foregoing circumstances a result of a unanimous decision following a detailed internal enquiry.

Ferguson said following the "seriousness of the remarks made by the TFL chairman, an internal enquiry was conducted through a series of meetings involving senior and former partners particularly those under whom Kale had worked extensively.

In the course of these meetings, a number of issues relating to Kale's past conduct emerged, the statement said.

Ferguson said out of the core team deployed on TFL special assignment, only one employee had resigned with prior notice to pursue higher studies abroad and it had nothing to do with the recent events, while the remaining members of the core team continue to be with them.

Ferguson said, "In pursuance to good corporate governance we believe it was our duty to withdraw our report for examination and review by totally new independent team from within the firm to be headed by another senior partner."

This team would examine and review all data, information collected and produce a new report, the statement said.

According to Ferguson sources, the partners were in an emergency day long meeting discussing the "sudden crisis like situation" following the exit of Kale and work was now being reallocated.

Ferguson said the total fees for audit and other work, both recurring and non-recurring, done by them for the Tata Group was around Rs 250,000 last year, an insignificant amount compared to the gross annual fees of the firm and were way below the limits set by the Institute of Chartered Accountants of India to ensure professional independence under the code of ethics.

ALSO READ:
The Tata Finance Fiasco
More Money Headlines