Money & Banking

IL&FS completes forensic audit of rating agencies

Our Bureau Mumbai | Updated on July 19, 2019 Published on July 18, 2019

NCLT allows the government’s plea to implead auditors

IL&FS on Thursday said that it has completed the first phase of forensic audit on credit-rating agencies who have been engaged with its group entities in the last decade.

The outcome of the forensic audit has not been made public

This comes even as the NCLT allowed a plea by the Ministry of Corporate Affairs to implead erstwhile IL&FS auditors Deloitte and BSR, saying that the entire case was a “Satyam-like scam”.

Among the other reasons cited by the NCLT for allowing the plea are the serious nature of the charges against the auditors, as contained in the SFIO chargesheet.

In a filing to the exchanges, IL&FS said that the audit evaluates the role of CRAs in rating various debt instruments and facilitating excessive borrowings from money markets across group companies, that eventually led to defaults.

This development comes close on the heels of CARE Ratings deciding to place Rajesh Mokashi, MD and CEO, on leave with immediate effect, until further notice.

Earlier credit rating agency ICRA informed the stock exchanges that its board of directors placed its MD and Group CEO Naresh Takkar on leave as it was looking into an anonymous complaint forwarded by regulator SEBI.

IL&FS got into a series of downgrades from July last year, when it first defaulted on inter-corporate deposits and commercial paper worth ₹450 crore.

CARE, ICRA, India Ratings and Brickwork have been the main rating agencies for ITNL, IFIN and IL&FS during the period reviewed by Grant Thornton.

Brickwork was introduced in ITNL (replacing CRISIL) and IFIN from 2016, during the period under review.

Published on July 18, 2019
This article is closed for comments.
Please Email the Editor