ILFS scam NCLT junks auditors plea against its powers to ban them


first_imgMumbai: In a major setback to auditors Deloitte and BSR, the National Company Law Tribunal Friday rejected their pleas challenging the tribunal’s jurisdiction to ban them for their alleged omissions and commissions in the ILFS Group scam. This is third setback for these foreign audit firms as earlier the tribunal had allowed the corporate affairs ministry to prosecute them along with 21 others in the same case, though implementation of the same has been stayed after they sought to challenge it at the appellate tribunal NCLAT. Also Read – Thermal coal import may surpass 200 MT this fiscalIn a second setback, the NCLT had on Thursday allowed the government to restate the books of the IL&FS group and its subsidiaries and allowed four new Mumbai based auditing firms to do so. The ministry had on June 23 moved the NLCT seeking a five-year ban on them in the IL&FS saga. Dismissing their petitions challenging the jurisdiction of the tribunal to ban them, the NCLT however, said it will hear the ministry’s application seeking a five- year ban on these auditors afresh on September 5. Also Read – Food grain output seen at 140.57 mt in current fiscal on monsoon boostThe auditors–the local arms of the Big Four global firms Deloitte Haskins & Sells and KPMG which has BSR & Associates as an affiliate here-had challenged the jurisdiction of the NCLT to ban them under Section 140(5) of Company’s Act which to auditors who are still on doing the job for the company in question and not past auditors. In the present case they resigned from the auditing service and thus cannot be banned under the given provisions. It can be noted that while Deloitte had stopped auditing IL&FS Group, which owes over Rs 95,000 crore to lenders and other financial institutions, by the end of FY18, BSR was the statutory auditor of IL&FS Financial Services (IFIN) resigned only in June this year–nine months after the company was sent for bankruptcy. The BSR counsel Darius Khambata and Deloitte’s counsel Janak Dwarakadas had also argued that before banning them, the tribunal has to pass a final order in the matter which establishes that fraud was indeed committed by the auditors. The ministry move to ban them came in after a probe by the Serious Fraud Investigation Office (SFIO) has found them guilty of painting a rosy picture of IFIN despite being aware of the poor financial health of the company. The counsels of the auditors had said merely based on an investigation by SFIO is not sufficient to ban them. The SFIO, in its report alleged that these auditors were aware that IFIN was lending to defaulting companies through group companies so that they could suppress their NPAs and not provide for the bad debt. Meanwhile, NCLT Friday approved the appointment of auditors to recast accounts of IL&FS and its subsidiaries. The ministry had on Thursday proposed Borkar & Mazumdar & Co and MM Chitale & Co for IL&FS and IFIN respectively; and GM Kapadia & Co and CNK & Associates for IL&FS Transportation Networks to recast account of IL&FS and its subsidiaries. Terming the ruling “unfortunate”, Deloitte in a statement said they “will review the order and decide on the future course of action shortly. “We remain committed to high standards of audit quality and ethical conduct in our professional practice. We have faith in the country’s regulatory and judicial processes and will continue to cooperate fully with the authorities,” a Deloitte spokesperson said in a statement. Reacting the development, BSR said it will challenge the NCLT order. “Based on the advice of our legal advisors, we will be appealing against the NCLT order. We believe we are entitled to receive the benefits of the due process of law and will continue to defend our position in accordance with the law,” BSR said.last_img read more

In the news today Jan 26


first_imgSix stories in the news for Friday, Jan. 26———ONTARIO TORIES TO CHOOSE INTERIM LEADEROntario’s Progressive Conservative caucus will meet today to choose an interim leader following Patrick Brown’s resignation in the face of sexual misconduct allegations. Brown stepped down as Ontario PC leader early Thursday after emphatically denying what he called “troubling allegations” about his conduct and character.———EDMONTON JAZZ LEGEND, EX-SENATOR TOMMY BANKS DIESTommy Banks, a renowned Edmonton jazz pianist and former senator, has died at the age of 81. His family said he died peacefully Thursday at a palliative care unit. Banks’ career began in 1950, and through the years, won both a Juno and Gemini award, hosted television shows and performed around the world. Banks was also a member of the senate from 2000 until 2011.———RCMP TO BE SENTENCED FOR LABOUR CODE VIOLATIONSThe RCMP will be sentenced today for Labour Code violations in the 2014 Moncton shooting that left three officers dead and two wounded. The force was accused of failing to provide its members and supervisors with enough information, instruction, equipment and training to adequately handle the rampage. The force could face a penalty of up to $1 million.———BOMBARDIER AWAITS U.S. TARIFF RULINGBombardier Inc. will find out today whether nearly 300 per cent duties will be applied to American imports of its C Series aircraft. The U.S. International Trade Commission will decide whether it believes Boeing stands to sustain harm from the planes. Boeing launched the trade case last April, arguing Canada and Britain subsidized the plane’s development and allowed Bombardier to sell it at unfairly low prices.———ANNIVERSARY OF QUEBEC MOSQUE SHOOTINGThe one-year anniversary of the Quebec City mosque shooting will be commemorated over a period of four days, beginning today. It was on Jan. 29, 2017, that a shooter entered the Islamic cultural centre of Quebec City and killed six while injuring 19 others, five seriously. The mosque will host a special prayer tonight that will be open only to Muslims, although it will be broadcast online.———B.C. SCHOOLS REOPEN AFTER THREATProvincial exams scheduled yesterday will be held today at three schools on Vancouver Island, after what officials call an “unprecedented” shutdown due to an unspecified threat. The Comox Valley School District has said it can’t provide information about the “danger or hazard,” but said RCMP would release details once an investigation is complete.———ALSO IN THE NEWS TODAY:— Former hostage Joshua Boyle is scheduled to appear in an Ottawa court to face 15 charges.— The sixth round of NAFTA negotiations continues in Montreal.— Statistics Canada releases the consumer price index for December.— HMCS Kingston and HMCS Summerside depart Halifax for the western coast of Africa.last_img read more