Maytas evaluation started before formal engagement letter: E&Y
Global auditing major Ernst & Young said it had started work on evaluating Maytas Properties even before signing a formal engagement letter and the process was 'much longer' than just one day.business Updated: Feb 25, 2009 23:13 IST
Global auditing major Ernst & Young on Wednesday said it had started work on evaluating Maytas Properties even before signing a formal engagement letter and the process was "much longer" than just one day.
Besides, E&Y said, it followed the standard industry practice for property companies to be valued on the basis of their land bank and development rights and it did not overvalue Maytas Properties.
Yesterday, the government counsel to the Company Law Board had alleged that E&Y valued Maytas Properties at Rs 6,523 crore against its turnover of mere Rs 22 crore.
"As per our knowledge, the company does not have any land bank and this company, having a turnover of mere Rs 22 crore, was valued at Rs 6,523 crore," the counsel said, adding that the valuation was done in a day.
Reacting to the charges, E&Y said in statement, "Our association with the engagement was much longer, which can be demonstrated by sufficient documentation on the matter."
"It appears likely that the allegation is based on the time elapsed between the signing of the contractual engagement letter with our client and the final date of submission of the report. As is normal in such cases, work on the engagement had been initiated prior to the formal signature on the engagement letter," E&Y said.