NCLT stays its own order to prosecute IL&FS auditors for 4 weeks

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July 25, 2019 7:50 PM

Staying its own order of July 18, the Mumbai NCLT gave 10 days to Udayan Sen and Kalpesh Mehta of Deloitte, and Sampath Ganesh of BSR Associates to file an appeal and said the impugned order would remain inoperative for the next four weeks from today.

NCLT, IL&FS, IL&FS auditor, industry news, Deloitte,  IL&FS scam,  IL&FS  news,  IL&FS share,  IL&FS crisisOn July 18, the NCLT had given the go-ahead to the corporate affairs ministry to prosecute Deloitte and BSR Associates for their failure to detect and report the scam that took place across the now bankrupt IL&FS group and 21 other entities (Image: Reuters)

The National Company Law Tribunal Thursday stayed its own order allowing the government to prosecute the three partners of Deloitte and BSR Associates for their alleged culpability in the IF&FS fraud following a plea to allow them to appeal at the appellate tribunal. Staying its own order of July 18, the Mumbai NCLT gave 10 days to Udayan Sen and Kalpesh Mehta of Deloitte, and Sampath Ganesh of BSR Associates to file an appeal and said the impugned order would remain inoperative for the next four weeks from today.

“We have heard the argument of the senior counsel for the applicant and the arguments advanced by joint director on behalf of the government. Since our order is appealable, the applicants are free to file an appeal. “Therefore we stay the operation of the impugned order and allow the applicants 10 days from today for filing an appeal,” the tribunal said in an order posted on its website and listed the matter for hearing on August 6.

On July 18, the NCLT had given the go-ahead to the corporate affairs ministry to prosecute Deloitte and BSR Associates for their failure to detect and report the scam that took place across the now bankrupt IL&FS group and 21 other entities, when they were the auditors of the scam-rideen and cripppled IL&FS Financial Services. The NCLT order its order is based on the findings of the probe conducted by the Serious Fraud Investigation Office.

The tribunal also allowed to the government to implead Udayan Sen and Kalpesh Mehta, partners of Deloitte, and BSR Associates partner Sampath Ganesh. While Deloitte resigned from auditing IL&FS group companies in FY18, BSR, which an affiliate of KPMG, did so in June well after the government sought to ban them from for five years. The NCLT is yet to give is nod to the government to do so.

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