MUMBAI: BSR & Co, sub-licensee of KPMG in India, has resigned as the auditor to Medi Assist Insurance TPA. Medi is the largest third-party administrator (TPA), providing services to health insurers. The audit firm is understood to have differences with the company, which led to the out-of-turn resignation.
Medi Assist was planning an IPO and had filed its draft red herring prospectus (DRHP) earlier this year. The DRHP names BSR as the statutory auditor and has said that there has been no change for the past three years. According to sources, the differences were over the company’s settlement of claims with healthcare providers. Sources said that the company changed the payment process to speed up settlement during the Covid pandemic, which auditors did not agree upon.
When contacted, KPMG said that it would not comment on the development. A Medi Assist spokesperson, in response to a query, said, that in keeping with industry practices the company had tailored its Covid response to the new world of unpredictability. “As the largest TPA, we constantly enable business continuity and help our customers access top quality healthcare. We have also engaged with a leading audit firm and are in the process of completing their appointment formalities. This change has no bearing on the company, its performance or its growth opportunities.” the spokesperson said.
In the resignation letter, BSR & Co said that it had completed the audit for FY21 and issued a disclaimer of opinion on November 16, 2021. “For the reasons included in the ‘Basis for disclaimer of opinion’ paragraph in our audit reports, we have carried out our annual continuance process and, basis that assessment, we express our inability to continue as statutory auditors of the company with immediate effect.”
Source said that the company was in talks to appoint PwC’s licensee as its new internal auditor and also planned to appoint BDO as external auditor. Medi Assist is the largest health benefits administrator in India. In its DRHP, Medi Assist has said that it has a market share of 22-25% of the total revenue pool of TPAs, and 44% of their profits.
Medi Assist was planning an IPO and had filed its draft red herring prospectus (DRHP) earlier this year. The DRHP names BSR as the statutory auditor and has said that there has been no change for the past three years. According to sources, the differences were over the company’s settlement of claims with healthcare providers. Sources said that the company changed the payment process to speed up settlement during the Covid pandemic, which auditors did not agree upon.
When contacted, KPMG said that it would not comment on the development. A Medi Assist spokesperson, in response to a query, said, that in keeping with industry practices the company had tailored its Covid response to the new world of unpredictability. “As the largest TPA, we constantly enable business continuity and help our customers access top quality healthcare. We have also engaged with a leading audit firm and are in the process of completing their appointment formalities. This change has no bearing on the company, its performance or its growth opportunities.” the spokesperson said.
In the resignation letter, BSR & Co said that it had completed the audit for FY21 and issued a disclaimer of opinion on November 16, 2021. “For the reasons included in the ‘Basis for disclaimer of opinion’ paragraph in our audit reports, we have carried out our annual continuance process and, basis that assessment, we express our inability to continue as statutory auditors of the company with immediate effect.”
Source said that the company was in talks to appoint PwC’s licensee as its new internal auditor and also planned to appoint BDO as external auditor. Medi Assist is the largest health benefits administrator in India. In its DRHP, Medi Assist has said that it has a market share of 22-25% of the total revenue pool of TPAs, and 44% of their profits.
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