Vakrangee Ltd, the Mumbai-based technology and distribution company, said the ministry of corporate affairs of India has ordered an inspection of its accounts for three years, and that PricewaterHouse will step down as the company auditor as part of the exercise.
The inspection will be carried out under section 206 of the Companies Act.
The section gives the government the right to requisition data and documents from a company if it feels that the disclosures are not satisfactory.
Vakrangee, which operates a franchisee-based model of IT-enabled service centers known as Vakrangee Kendras, has been the subject of much speculations around its financial state, leading to high volatility in its share price.
The company’s stock, which used to trade as high as Rs 505 in January this year, is currently priced at around Rs 28.
The inspection will include checking the company’s tax filings for five years, check the details about its Vakrangee Kendras and deposits taken from its franchisees and the company’s overall shareholding structure.
“We welcome the decision by MCA (ministry of corporate affairs) as it would help us clear all the doubts and rumours with respect to our financials and books of accounts.
“We would fully co-operate on this and would try to complete this exercise at the earliest,” the company said.
The company’s 45,000 or so Vakrangee Kendras provide services like disbursement of government subsidies, pension and basic banking under National Pension System and Pradhan Mantri Jan Dhan Yojana, processing of passport applications, microinsurance and so on.