IL&FS: Government challenges stay on BSR & Associates in SC

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Published: September 17, 2019 1:52:56 AM

Due to the stay, the NCLT on September 5 adjourned the hearing on the ministry's petition seeking a five-year ban on former IL&FS auditors, including Deloitte Haskin & Sells.

IL&FS, supreme Court, supreme Court of india, BSR & Associates, corporate affairs, Bombay High CourtThe Serious Fraud Investigation Office (SFIO) in May had filed a criminal complaint against 30 parties in the IL&FS case, including BSR & Associates and Deloitte. (Reuters)

The ministry of corporate affairs has moved the Supreme Court challenging the stay granted by the Bombay High Court on proceedings against BSR & Associates in the IL&FS case.

The Bombay HC had restrained the government from taking coercive action against the auditing firm at the Mumbai-bench of the National Company Law Tribunal (NCLT) and Mumbai’s sessions court for its alleged role in the IL&FS case.

Due to the stay, the NCLT on September 5 adjourned the hearing on the ministry’s petition seeking a five-year ban on former IL&FS auditors, including Deloitte Haskin & Sells.

Meanwhile, the National Company Law Appellate Tribunal (NCLAT) on Monday adjourned the hearing on auditors’ pleas against impleading them as parties in the IL&FS case. The appellate tribunal will hear the petitions on September 25.

The Serious Fraud Investigation Office (SFIO) in May had filed a criminal complaint against 30 parties in the IL&FS case, including BSR & Associates and Deloitte. In its complaint, the SFIO accused these auditors of colluding with officials of IL&FS Financial Services to conceal facts and fraudulently falsifying the books of accounts and thereby financial statements from FY14 to FY18.

Based on the SFIO’s findings, the ministry had in June filed a petition in the NCLT seeking a ban on the auditing firms. The NCLT had rejected the auditors’ pleas challenging the jurisdiction of the tribunal to ban them. The financial affairs of the IL&FS group came under scrutiny last year after it defaulted on short-term and long-term debt obligations to the tune of Rs 91,000 crore.

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