NEW DELHI: In a major setback to Deloitte and BSR, auditors of the beleaguered Infrastructure Leasing & Financial Services Ltd (IL&FS), the National Company Law Tribunal (NCLT) rejected their applications challenging the tribunal’s jurisdiction to ban them from business for five years in connection with the case.
This is the second blow for these foreign audit firms. Earlier, NCLT had allowed the corporate affairs ministry to prosecute them along with 21 others in the case, though the implementation of the same has been stayed after they sought time to challenge the order at the National Company Law Appellate Tribunal (NCLAT).
“We know that this case will go all the way to the NCLAT and the Supreme Court,” NCLT observed while pronouncing the oral order. “The order is appealable. There is a reasoned 60-page order, which will come soon,” it added.
However, the tribunal said it will hear the ministry’s application seeking a five-year ban on these auditors afresh on September 5.
“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,” Deloitte said in a statement.
Also, the corporate affairs ministry has proposed four auditing firms to NCLT to restate the IL&FS accounts and some of its subsidiaries to verify fraudulent transactions.According to sources, the auditors MCA has suggested are: Borkar & Muzumdar and Mukund M Chitale & Co for IL&FS and IFIN respectively; and GM Kapadia & Co and CNK & Associates for IL&FS Transportation Networks.