Governance review: As the Paytm Payments Bank crisis unfolds, President of statutory body The Institute of Chartered Accountant of India has said their financial reporting review board (FRRB) is likely to delve on issues pertaining to the fintech.

Ranjeet Kumar Agarwal, who has been recently elected to his post, on Sunday also threw light on the progress of FRRB’s review of embattled edtech BYJU’s accounts pertaining to governance concerns, adding that underway progress is going on well.

"So far, we have not considered it (Paytm issue), but the board meeting of the FRRB will take place in the near future and it will consider appropriate action if required. So far, we have not decided anything as far as this matter is concerned," ICAI President Ranjeet Kumar Agarwal told PTI in an interview.

The statutory body’s newly elected committees, which include the FRRB will likely start holding the meetings from March, Agarwal said.

This comes as the Reserve Bank of India levied restrictions on Paytm Payments Bank over regulatory concerns, and persistent non-compliance by the listed fintech.

In light of the events, FRRB will look into the need of any scrutiny of Paytm’s books, over allegations of regulatory lapses on part of the company which also affect its payment bank's accounting, he said.

"It is the discretion of the board whom to review and when to do so. It has a robust system," Agarwal added.

The BYJU'S Review

When asked if ICAI was awaiting a formal complaint regarding Paytm, Agarwal said the institute is in a position to take suo moto cognizance of the issue, as well as through complaints. 

“In BYJU’s case, it was suo motu," he added.

On the BYJU’s case, he said the progress on the board's scrutiny is "going well” with the report expected to be out by the end of 2024. 

Agarwal also explained the FRRB structure, saying it has a three-tier structure on technical levels, followed by the group, and then finally the board review. 

The FRRB is empowered to review the financial statements of listed companies, he emphasised.

"In cases of gross negligence, we proceed with further investigation. If there are minor issues, we provide advisory guidance," Agarwal said.

The FRRB was constituted in July 2002, as an important wing of ICAI which works to bring improvements in financial reporting practices, promoting investors’ confidence in audited statements.

BYJU’S is facing a tussle with its investors over the ouster of founder Byju Raveendran and his family, who are the only board members of the embattled edtech as of now.

Investors have approached the National Company Law Tribunal and also held an Extraordinary General Meeting which was skipped by the BYJU’s board, and also faced disruptions from unauthorised entities in the virtual meeting. 

The investors, including General Atlantic, Prosus, PeakXV and Chan Zuckerberg allege mismanagement and governance issues on part of the company and its board.

They hold over 32 per cent stake in Think and Learn (T&L), which operates the online tuition platform.