Seeterram: I did not cook HCU books
By Andre Bagoo Thursday, October 25 2012
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CHARTERED accountant Chanka Seeterram, 71, yesterday insisted he did not cook the books at the Hindu Credit Union (HCU) and was seeking to protect the interests of the population at large when he opted to deal with a $31 million loss as a prior-year adjustment.
“I did not cook the books. No auditors cooked the books, that simply did not happen,” Seeterram told Newsday. “What happened was reflected in the accounts in the balance sheet. The accounts fully reflected the full thing. I am one hundred percent sure that I have done no wrong. The $31 million is reflected in the accounts one hundred percent.”
On Tuesday, Seeterram told the Colman Inquiry that he placed a $31 million loss in the 2005 HCU accounts from the profit and loss statement to the area of the accounts dealing with retained earnings; not telling an HCU annual general meeting of a $150 million loss; and hastily forwarded accounts at the request of former HCU president Harry Harnarine.
The $31 million was recorded in the Statement of Changes in Members Equity & Reserves as at September 30, 2005 as a deficit under undivided earnings. The sum is identified as “Prior Year - Deficit on Revaluation of Fixed Assets” and wiped out most of the undivided earnings. The loss was tied to re-evaluations of properties the values of which had been overstated since 2004.
While lawyers at the inquiry said the $31 million loss was not, in fact, properly accounted for, Seeterram insisted he complied with proper accounting standards.
“This did not happen in 2005. I was doing the 2005 accounts in the year 2006, months after 2005,” he said. “And when doing it I observed this and insisted that you had to bring this into the 2005 accounts.”
“It is proper accounting policy to anticipate a loss of income if you see a loss incurred so that people can be sensitised,” he said. “If an auditor is doing his job, he should bring it in properly. The six properties were sold in 2006 at a net loss or rather for a lower value than what was in the books when they were re-valued in 2004.”
The chartered accountant – who now faces the possibility of an action calling for the removal of his practicing certificate from the ICATT – said he was trying to protect everyone concerned.
“It was my idea, I wanted to bring it into the profit and loss statement but management insisted that it was not related to 2005’s performance.
“I brought it in as a compromise trying to protect everybody; not to cause panic; to slow the loss which was incurred in 2005. I have now got licks for this but people know that what I did I did to help. I did my one hundred percent best now I have to live with that for the rest of my life,” he said.
Seeterram – who told the inquiry that accounts were prepared in one instance “in a haste and in a rush” – said this never compromised the accounts.
“What is or is not a rush is sometimes a minor difference,” he said. “There was nothing that compromised the integrity of the accounts themselves. The accounts are one hundred percent accurate in relation to this $31 million loss.”
Harnarine yesterday attempted to distance himself from Seeterram’s actions. He said he was not aware that the provision made was not in accordance with accounting practices.
“I am not an accountant,” he said. “I was never aware of that. Management came to me and told me we could take it from the reserve fund.” He admitted he never told HCU membership of the exact quantum of the loss.
“I thought the advice I received was sound advice,” he said. “If it is wrong it is wrong. If it is not in keeping with standards it is wrong.” He said of the $150 million loss which was not disclosed to a 2006 AGM, “It actually ended up being a $190 million loss and that was later reported.”
He denied ever rushing Seeterram.
“We did not rush him,” he said. “It was a collaborative effort.”