In Wednesday’s session, Shares of AU Small Finance Bank rebounded 7 per cent after a 13 per cent crash on Tuesday as the management clarified the recent exits in the bank, including on the resignation of internal audit head, Sumit Dhir. On August 31, 2021, the bank in an exchange filing said, Sumit Dhir resigned due to some personal reasons.
The Bank said, “Mr Sumit Dhir has expressed his desire to move back to his hometown Delhi due to changes in his personal circumstances following Covid second wave. He continues to be on our rolls as Head of Internal Audit and we remain in discussions with him for possible retention.”
The scrip, however, erased most gains and was trading at Rs 1151.85, up 2 per cent around 12.55 pm as against a 0.14 per cent fall in BSE Sensex at 57,471. In the previous session. After a media report informed about the exit of Dhir, the stock tanked.
On August 29, the company said appointing Deepak Jain in the bank, at Chief Risk Officer Alok Gupta’s place, “We wish to inform you that the Board of Directors of the bank on August 28, 2021, approved the appointment of Mr Deepak Jain, who is currently serving as Chief Operating Officer and Key Management Personnel as Chief Risk Officer of the Bank for a period of three years, with effect from September 1, 2021.”
Meanwhile late last evening the company clarified, that it has a full-fledged Internal Audit team with -50 members and 7 external concurrent audit firms which have remained stable over the last four years.
“We want to confirm that there is not a single other resignation in the top-50 senior management team or the Board of Directors. Some challenges remain around the Jaipur location which we are addressing by scaling up Mumbai and other regional offices at key cities, like Delhi, Pune, Indore, Chandigarh, etc. We had disclosed this consideration in our Q1 earnings call on August 6, 2021, and AGM on August 17, 2021,” the company said.
“Steadily rising asset-quality concerns amid the Covid-induced disruption, the series of resignations in the audit/risk functions, and delayed disclosure of these resignations have irked investors. We believe the bank’s rich valuation leaves no margin for error,” said analysts at Emkay Global.
Adding further he said, “We believe the resignations in audit/risk functions may raise investor concerns about the sanctity of the books/ risk management practices. However, management has tried to allay such concerns and indicated that there were no red flags by the RBI in its recently completed audit.”