Backdated Resignation of Auditor Backfired: Company hits back “Unprofessional Behaviour”

A new incident occur in Corporate Governance, a statutory auditor submitted his resignation letter on 18th November but was allegedly backdated to 14th November to allegedly prevent the incomplete limited review report signing.

The Company hits back and says “A series of unprofessional actions that we believe warrant futher discussion….”.

The Auditor said in resignation letter, “Pursuant to Regulation 30 of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, we wish to inform that M/s. ARMS & ASSOCIATES (RRN NO: 013019N) has tendered her resignation from the post of Statutory auditor of JOINTECA EDUCATION SOLUTIONS LIMITED due to pre-occupation as mention in resignation letter dated 10.11.2024 which was digitally signed on date 14.11.2024 after business hours and letter was received by us on 18.11.2024.

The noting of resignation will be taken and approved at the ensuring Board Meeting of the Company and the appointment of subsequent statutory auditor shall be intimated to the Stock Exchange in due course of time.

Request you to take the same on record and acknowledge the receipt.”

Letter of Acknowledgment by the Company:

I want to acknowledge that on behalf of company to formally express our concerns regarding the resignation letter submitted by the auditor firm, We received resignation letter, dated 10th November 2024, on 18th November 2024. Upon review, we have observed a series of unprofessional actions that we believe warrant further discussion.

1. Backdating of Resignation Letter: The resignation letter was digitally signed on 14th November 2024, yet it was received by the company on 18th November 2024. This raises concerns about the authenticity and timing of resignation. The letter’s backdating, particularly considering it was signed after business hours on 14th November 2024, appears to be inconsistent with the standards of transparency and professional conduct expected from an auditor.

2. Lack of Communication: At no point before the resignation auditor firm have not informed us of any intention to resign or of any issues that might prevent them from fulfilling your duties, including the submission of the limited review report due on 14th November 2024. Auditor decision to notify us of the resignation on the last day, without prior communication, is highly disruptive and unprofessional, leaving the company unprepared for the sudden change.

3. Insufficient Explanation for Resignation: The explanation you provided 3 that firm’s peer review has expired, and therefore you cannot provide the required report is vague and does not offer sufficient detail. We would appreciate a more thorough explanation of the reasons behind this decision, especially given the timing and the lack of prior communication on such an important matter.

4. Failure to Submit Resignation Letter through Official Channels: Additionally, we note that the resignation letter was not sent through official company channels. It is a matter of concern that we received the resignation letter outside of our official communication channels, which further compounds the lack of transparency and professionalism in this matter.

Given these points, we are concerned that the resignation process and the actions taken by auditor firm may not meet the professional standards expected of a statutory auditor. We expect transparency and clear communication in such matters, as they directly affect the governance and operational processes of our company.

Due to all this reason there was delay in filing intimation of resignation of auditor. So please it’s my humble request to you to accept the resignation intimation by company.

Link for Company Reply to Resignation Letter