Videocon to be subjected to forensic audit

A consortium of lenders headed by the State Bank of India (SBI) has ordered a forensic audit of Videocon Industries' accounts in order to determine whether the company has faultered as a result of difficult business conditions or only financial mismanagement, according to various market reports.

The forensic audit will be conducted by the professional services company KPMG before Videocon marches forward with loan restructuring under the insolvency and bankruptcy code, as reported by a financial daily.

Several stakeholders have expressed a requirement of loan restructuring as Videocon has burdened itself with towering debts. The company has a consolidated outstanding debt amount worth Rs 44,000 crore, equally divided between the company's overseas and domestic operations. The company's consolidated gross debt stood at Rs 47,500 crore at the end of December 2015.

The audit stands crucial for the company as, if the audit proves that a difficult business environment was the reason for the company's prevailing state, the company will be able to proceed with its loan restructuring plans, while in case of identifying financial mismanagement has te cause of downfall for the company will lead to filing of charges on the company.