Auditor admits to hiding $31m loss

[kevcam]

AUDITOR Chanka Seeterram yesterday testified that he doctored the Hindu Credit Union's (HCU) financial statements in order to hide a $31 million loss and buy the cash- strapped credit union some time.

Seeterram said the decision which was made behind closed doors was for the greater good.

Seeterram made the statements as he took the witness stand at the enquiry for the second consecutive day.

The $31 million loss was as a result of the revaluation of property.

During cross-examination by commission junior counsel Marion Smith, Seeterram said he believed announcing the multi-million-dollar loss would have caused a financial crisis in the cash-strapped credit union, so he opted to help the HCU buy some time to get their act together.

SMITH: You haven't identified the accounting standard that permits this practice

SEETERRAM: No

SMITH: Do you know?

SEETERRAM: No

SMITH: Did you look at the time?

SEETERRAM: I think this was done by management probably deliberately in the sense that if that loss was worked into the accounts in the current year the net surplus of $6 million would have ended up in a $25 million deficit.

SMITH: So management deliberately in your view put it where we see it at Page 466.

SEETERRAM: I would have to say yes.

SMITH: But what is your opinion, because you are the auditor, part of your task isn't it to assess that sort of decision?

SEETERRAM: Yes.

SMITH: And to assess the validity of that approach.

SEETERRAM: Yes.

SMITH: So I ask again, did you carry out that sort of assessment?

SEETERRAM: This was a very delicate matter that I had to decide upon, in that the Hindu Credit Union at that point in time was experiencing a run. We were in 2006 and it was instilling numerous problems where people were demanding funds and what not.

If this account had reflected a loss for the current year I thought they felt that there would definitely be a run of some magnitude that they could not sustain whatsoever.

I insisted that it had to be brought into the accounts regardless of the fact that the loss occurred in 2006.

I felt very strongly that it had to come into the 2005 accounts and they felt the only way possible is that since there were retained earnings in there maybe it could be shown as a prior year adjustment in there.

This was what I called a compromise in the understanding that it would possibly buy some time for Hindu Credit Union to get their act together to be able to do what they thought was necessary to turn around the company because I felt if this was shown in the profit and loss account ... to show this massive loss inside there ... they could not face the outcome.

SMITH: Let's be clear Mr Seeterram, it should not be there.

SEETERRAM: Yes.

Seeterram said the $31 million loss should have rightfully been included in the profit and loss account.

SMITH: Your concern was that if you insisted upon that (including the $31 million loss in the profit and loss account) that would have been the end of the HCU.

SEETERRAM: I was looking at the bigger picture, yes.

Smith asked Seeterram if he felt the move was in the best interest of HCU members.

"What I felt is that the management needed some time to check their options that were available. And the options that were available was that the way the HCU was going at the time they could not continue and they needed external help and they needed to buy some time to get that help," Seeterram said.

Seeterram said it was a "very difficult decision".

He eventually advised the HCU to seek assistance from the State to correct their financial difficulties.

Seeterram said he spent 13 years as a partner at Pannell Kerr Forster during a 17-year stint at the company. Pannell Kerr Forster is now Ernst and Young.

Seeterram said he has been an auditor for 43 years.

He is the chairman of Habitat for Humanity and aided the government with the preparation for this year's 50th anniversary celebrations.

http://www.trinidadexpress.com/news/Aud ... 31531.html

[Dizzy28]

An auditor in Trinidad underhandedly preparing an Audit?
Say it isn't so

[VexXx Dogg]

his professional integrity is questionable and reputation is now irrepairable.
I hope it was worth it.

[Centric]

♫ Dis is madness!! ♫

[Dizzy28]

In a 1st world country ones Charter/professional designation can be revoked for this.

[Centric]

^ T&T is ah joke nation. Something happen and everybody is like :O.....then point fingers in every direction but themselves, have a 10 year long inquiry gathering "intelligence", crapoud smoke man pipe, teddy eat woman buscuit, no one goes to jail, starts over within 5 years.

In America, all HCU officials in jail droppin soap by now.

[sharkman121]

his professional integrity is questionable and reputation is now irrepairable.
I hope it was worth it.

the integrity of other auditing firms may become under question also.

[AVB Marketing]

Being the auditor, he has a moral and ethical obligation to report the true state of the accounts of HCU.

***Smith asked Seeterram if he felt the move was in the best interest of HCU members.***

Seetarram meant this move was in his best interests....
This man was most likely bought by HCU, he should be reported to ICATT & ACCA....

[src1983]

In a 1st world country ones Charter/professional designation can be revoked for this.

Most likely this will happen.....his ACCA membership and qualification would be revoked.......

I don't know what the local Accounting community (ICATT) would do though

[acesinghit]

1 of the thousands that came to surface.....chanka seetaram ought to be ashamed of himself

[Conrad]

Depends on if he's accredited in the first place and by whom.

Please PP government, if there's one thing to do right, PLEASE HANG THESE F@CKERS HIGH!

And yet our PM wants to boast we've come off the black list, smh.

[rfari]

ways. he have belly dan

[jmccomie]

Being the auditor, he has a moral and ethical obligation to report the true state of the accounts of HCU.

***Smith asked Seeterram if he felt the move was in the best interest of HCU members.***

Seetarram meant this move was in his best interests....
This man was most likely bought by HCU, he should be reported to ICATT & ACCA....

I think he should be held just as accountable for that stupid decision he made. As an auditor he have a fiduciary responsibility to the policy holders of HCU, to ensure that the financial statements reflect a true an fair view.
He has definitely brought shame to the accounting/auditing profession.

[Conrad]

Being the auditor, he has a moral and ethical obligation to report the true state of the accounts of HCU.

***Smith asked Seeterram if he felt the move was in the best interest of HCU members.***

Seetarram meant this move was in his best interests....
This man was most likely bought by HCU, he should be reported to ICATT & ACCA....

I think he should be held just as accountable for that stupid decision he made. As an auditor he have a fiduciary responsibility to the policy holders of HCU, to ensure that the financial statements reflect a true an fair view.
He has definitely brought shame to the accounting/auditing profession.

You just did exams didn't you?

[jmccomie]

^^ Nah nah

[JoeBama]

it was a decision that was made behind closed doors..... question was he the company auditor or external..hired by the company or gov't?? you will see how the pp govt will make a big deal out of this to distract everyone once again from section 34...smh

[shogun]

Depends on if he's accredited in the first place and by whom.

Please PP government, if there's one thing to do right, PLEASE HANG THESE F@CKERS HIGH!

And yet our PM wants to boast we've come off the black list, smh.

Interrupt parliament to boast too.

[pugboy]

ACCA will most likely have the balls to revoke him as an accountant/auditor

[toyolink]

This kind of behaviour is not new and continues since it is a fact who pays the piper calls the tune.
Many professionals (ie accountants, valuators and regulators) are required to act as independent adjudicators,but when the client is a big institution or a major source of fees they are unable to find the strenght to take a stand consistent with their professions standards of reporting.
The collapse of financial institutions world over in the most recent past has been attributed to this kind of thing.
If banks in this country are made to write off obviously non performing loans,the hit on their financials are going to be significant and possibily seriously damaging (remember NCB).
Don't even talk of valuators who provided clients with grossly over-stated values on properties which were used as collateral against hugh bank loans and banks are today having to deal with non performing loans where the security is so impaired that the banks exposures are totally out of wack.
Remember property valuators earn fees as a % of value.
BTW some people call these things creative accounting and over the last decade financial engineering.

[afterburners]

After all the talk tho, fact remains, ppl who get ketch in corruption late in life already had their full enjoyment of wealth, their children born and grow up with every possible advantage and networks etc. Nobody taking that away from them, no matter how much reputation destroy now. Lesson, doh envy nobody, you never know how they come to have all the money and property they have.

[Oleander]

No surprise here.. As said before this is nothing new...
HCU was doing nonsense.
Seeterram gave HCU a means of hiding their mismanagement of people's money... He needs to face the punishment and we hope that he would be along with the rest of that bandwagon.

[toyolink]

Have you ever did any of the following?
-Knowingly,ask repairer for an estimate which far exceeds the cost of repairs to cover excess.
-Knowingly,provide bank loan officer with estimate to support application which is untrue.
-Knowingly,ask valuator for value on report which you both know is over-stated.
-Knowingly,approach a vat registered vendor to purchase goods/services on a 'vatfree' arrangement.
-Knowingly,tell the customs officer that the items you brought in didn't cost 'much'.
.......Hmmmmmmmmm.

[Conrad]

Nope. :l

JAIL HIM!

[Dizzy28]

Have you ever did any of the following?
-Knowingly,ask repairer for an estimate which far exceeds the cost of repairs to cover excess.
-Knowingly,provide bank loan officer with estimate to support application which is untrue.
-Knowingly,ask valuator for value on report which you both know is over-stated.
-Knowingly,approach a vat registered vendor to purchase goods/services on a 'vatfree' arrangement.
-Knowingly,tell the customs officer that the items you brought in didn't cost 'much'.
.......Hmmmmmmmmm.

No to all

[Greypatch]

time for him to loose his license and make a jail for that

[Country_Bookie]

The Institute of Chartered Accountants of Trinidad and Tobago (ICATT) has not made any decision on what course of action, if any, would be taken against auditor Chanka Seeterram for his treatment of the Hindu Credit Union’s (HCU) accounting records.
At the HCU enquiry on Tuesday, during cross-examination by British lawyer, Marion Smith, Seeterram testified that he agreed to treat a $31 million loss experienced by HCU in 2005 as a prior-year adjustment rather than in the profit and loss account, where he agreed on Tuesday it should have been.
Seeterram’s decision meant that the credit union was able to report a surplus of $6 million, when it should have reported a loss of $25 million. Under cross examination, Seeterram admitted that he hid the loss because the management “needed to buy some time to get some external help.”
In an interview, President of ICATT, Derek Mohammed said the matter would have to be discussed by ICATT’s Council and a determination would have to be made on whether any action can be taken. Mohammed, who is a partner with Deloitte & Touche, assured that the profession is governed by a code of ethics and its membership is bound by that code. Mohammed added that as head of ICATT, on an overall basis, he is concerned.
Asked whether Seeterram would be fined, Mohammed said due process would have to take place and if it is determined that there is a case, then the disciplinary committee would have to take action. Asked whether altering the accounting records of businesses is normal and proper accounting, Mohammed said: “An auditor shouldn’t do that. It would be contrary to international standards on auditing.”
Asked whether Seeterram’s decision to alter the HCU’s books is considered to be fraud, Mohammed said it depended on the outcome of the investigation if any investigation would be conducted. ICATT’s rules of conduct handbook, which is posted on its Web site, states that a member of the organisation “shall not knowingly misrepresent facts,” and requires accountants to conduct themselves “in a manner consistent with the good reputation of the profession.”
The rules of conduct also states: “A member shall not express an opinion that financial statements are presented in conformity with generally accepted accounting principles if such statements contain any departure from an accounting principle promulgated by Council which has a material effect on the statements taken as a whole, unless the member can demonstrate that due to unusual circumstances the financial statements would otherwise have been misleading.”
ICATT is expected to issue an official statement later this week.

In other words, we gonna wait till the furore dies down and then give him a stern talking to and make him promise not to do it again.

[Greypatch]

in the best interest of depositors...yea rite...look what that got them..

jail him...

[SR]

question

who was he working for at the time?? HCU or an independent body doing an audit on hcu books??

[eliteauto]

if you've ever seen Chanka's house and the numerous buildings/companies he owns, censure does not affect him, jail is also unlikely this is Trinidad not the U.S.

[BRZ]

Admist all of this, Senor Harry was still purchasing Million dollar personal luxuries for himself............. interesting................