The independent auditor of listed financial institution People’s Leasing and Financial Services Limited (PLFS) has identified 19 major issues in the company’s financial statements for the year ended December 31, 2025, raising serious concerns over the reliability of its accounts and its ability to continue as a going concern.

In the audit report, the auditor said PLFS did not prepare consolidated financial statements despite having a subsidiary, PLFS Investments Limited, as required under applicable accounting standards. This may have resulted in material differences between the group’s actual financial position and the published accounts.

The report also found significant inconsistencies in transactions between the parent company and its subsidiary. While PLFS reported receivables of Tk 1.63 billion from the subsidiary, the subsidiary claimed that the parent company owed it Tk 1.81 billion. Investment records between the two entities also showed discrepancies.

Major differences were also detected in deposit and loan balances. The auditor found mismatches of around Tk 177 million in deposits and Tk 819 million in loans and advances between the company’s financial statements and supporting records, raising concerns over the accuracy and reliability of its accounting system.

The report said 98.09 percent of the company’s total loan and lease portfolio had become classified. Of the total outstanding loans and leases of Tk 10.78 billion, classified loans stood at Tk 10.57 billion, reflecting severe deterioration in asset quality.

The auditor also noted that 335 out of 426 borrowers had received loans without acceptable collateral, while the value of eligible security was only Tk 589.7 million against the company’s total loan portfolio.

Further concerns were raised over the company’s liabilities to banks and financial institutions. The auditor said PLFS had not recognised interest expenses on these borrowings since 2019, although such charges were required under loan agreements. Recognising the interest would have significantly increased both liabilities and accumulated losses.

The report also highlighted several regulatory and governance failures, including non-compliance with Bangladesh Bank’s Cash Reserve Requirement (CRR) and Statutory Liquidity Ratio (SLR), failure to transfer undistributed dividends to the Capital Market Stabilization Fund, and unpaid VAT, tax and excise duties amounting to more than Tk 2.32 billion.

In addition, the auditor found outdated fixed asset records, inadequate supporting documents for several investments and expenses, and multiple breaches of the Finance Company Act and other regulatory requirements.

Under the Material Uncertainty Related to Going Concern section, the auditor said continuous losses, negative equity, inadequate capital and negative operating cash flows cast significant doubt on the company’s ability to continue its operations.

Despite the extensive findings, the auditor issued a qualified opinion, saying the numerous irregularities raise serious questions about the reliability of PLFS’s financial reporting and internal controls.