Infibeam board suggests laying off auditor EY for ‘data breach’

Infibeam board suggests laying off auditor EY for ‘data breach’
Photo Credit: Photo Credit: VCCircle
6 May, 2019

The board of Infibeam Avenues Ltd, which had agreed last year to sell a wholly-owned unit that operates its online marketplace to billionaire Shapoorji Pallonji Mistry-backed Suvidhaa Infoserve Pvt. Ltd, has suggested terminating the services of SRBC & Co. LLP, one of its joint statutory auditors, for alleged data breach.

Chartered accountancy firm SRBC & Co. LLP is the audit arm of Big Four accounting and advisory firm EY.

“The board of directors in its meeting has recommended, subject to approval of regulatory authorities and shareholders, to terminate SRBC & Co. LLP’s services on the grounds of sharing the company’s unpublished price-sensitive information with personal email accounts of their team and third party on multiple occasions, leading to breach of trust and loss of faith,” Infibeam Avenues informed the BSE in a filing.

Infibeam Avenues also said the auditor has verified and confirmed the sharing of data.

The company further said that chartered accountant firm Shah & Taparia will continue to be the statutory auditors.

The Big Four companies have been embroiled in a string of controversies in India for alleged audit malpractices including corporate failures of IL&FS and Jet Airways. Recently, the Bar Council of Delhi has directed KPMG, PwC, EY and Deloitte India to refrain from practising law until further orders.

In September last year, the share price of Infibeam fell more than 70% on account of rumours on messaging app WhatsApp. According to a report by Bloomberg, a message attributed to brokerage firm Equirus Securities had been doing the rounds on WhatsApp claiming that Infibeam had given interest-free and unsecured loans to a unit with negative net assets. Infibeam issued a stock-exchange disclosure a couple of hours after closing bell in which it addressed this matter.

In January this year, SRBC & Co. had sought a detailed report from the company about a probe into the firm’s merger with Avenues India Pvt. Ltd, which operated payment gateway company CCAvenue. Infibeam had acquired CCAvenue at a valuation of Rs 2,000 crore in an all-stock deal.