The ministry of corporate affairs (MCA) on Monday moved the Mumbai bench of the National Company Law Tribunal (NCLT), urging that Deloitte Haskin and Sells and BSR Associates, auditors for IL&FS Financial Services (IFIN), be barred from providing audit services in the country for five years.
The move follows a Serious Fraud Investigation Office’s (SFIO) probe, which has found that auditors had failed to present the “true and fair” state of affairs of IFIN. The MCA counsel said the probe revealed that the auditors did not ask questions when loans were given to companies with negative net worth or inadequate security.
IL&FS Financial Services is among the 348 subsidiaries of the IL&FS group, which owes more than Rs 95,000 crore to lenders. The group ran into trouble after many of its arms began defaulting since last September, and on October 1, the government had suspended its board and taken over the company.
