SFIO has asked the Reserve Bank of India to undertake an internal investigation to understand why there was the delay in taking required action in the IL&FS case by auditors BSR & Associates LLP and Deloitte, Haskins & Sells.
Corporate fraud investigation body Serious Fraud Investigation Office (SFIO) has asked the Reserve Bank of India (RBI) to undertake an internal investigation to understand why there was the delay in taking required action in the IL&FS fraud case by auditors BSR & Associates LLP and Deloitte, Haskins & Sells (DHS). SFIO has also recommended the RBI for taking required policy actions as per the provisions in order to avoid similar instances of fraud ahead.
The SFIO has also sought required action as per the Companies Act by IL&FS Financial Services (IFIN) current management to recover losses incurred by the company because of the fraud conducted by a nine-member coterie, PTI reported citing officials.
The fraud investigator had filed the first chargesheet in a special court in Mumbai last Friday against the coterie after probing IFIN even as probes are ongoing at the group’s other companies and the parent company IL&FS that faced significant financial problem last year after it was found to have a heavy burden of stressed loans worth more than Rs 90,000 crore. The chargesheet had also accused 30 entities/individuals of multiple offences.
The SFIO said it was noticed in the inspection reports 2015 onwards that RBI had mentioned multiple times about non-compliance to group exposure norms at the company along with miscalculation of Net Owned Funds but IFIN was let off to continue as usual.
However, it was only on November 1, 2017, that IFIN was pointed about the issue on the classification of group companies to arrive at the NOF and CRAR as per RBI Act, according to the findings in the report.
The scam was unearthed last year when IL&FS and its subsidiaries failed to pay multiple debt repayments because of the liquidity crisis. The group owed more than Rs 90,000 crore to banks and other creditors till March 2018.
The government had on-boarded prominent banker Uday Kotak as the executive chairman of the new board constituted after suspended the previous one in October last year.