IL&FS crisis: ICAI sends notices to statutory auditors

The institute has sent letters to the Reserve Bank of India (RBI) and the Serious Fraud Investigation Office (SFIO), which have been investigating into the issue.

The Institute of Chartered Accountants of India (ICAI) has sent showcause notices to the statutory auditors of the Infrastructure Leasing & Financial Services (IL&FS) group.
 
“The Disciplinary Directorate of the ICAI, upon coming across media report on IL&FS, has suo motto taken cognizance of the matter and pro-actively issued notices to the statutory auditors on October 4,” Naveen Gupta, President, Institute of Chartered Accountants of India (ICAI), told BusinessLine.
 
He said the notices have been sent to seek their explanation in the matter.
 
The institute has sent letters to the Reserve Bank of India (RBI) and the Serious Fraud Investigation Office (SFIO), which have been investigating into the issue, Gupta said.
 
According to a report by Mediacontrol, the new board of directors headed by Uday Kotak is in the process of hiring a professional independent agency to help plug the loopholes in the mess.
 
Earlier in the day, Kotak met the Ministry of Corporate Affairs (MCA) Secretary to give him a first-hand assessment of IL&FS, the report said.
 
Going forward, Reserve Bank of India, last week, warned stricter regulations are in the offing to ward off default risks rising from the so-called asset liability mismatch, reports Bloomberg. 
 
The debt-ridden company has been making headlines after revelations of a series of defaults by its group companies in September, followed by resignations of its Managing Director and Chief Executive Officer Ramesh Bawa, and several other independent board members.
 
The debt-ridden company Infrastructure Leasing & Finance (IL&FS) in now under the control of the government.
 
NCLT sacked the IL&FS board on October 1 and asked the government to devise a plan for the group by October 15.
 
The government has constituted a panel headed by Kotak Mahindra Bank’s CEO and Managing Director Uday Kotak, with five other members — ICICI Bank chairman Girish Chandra Chaturvedi, ex Sebi chief GN Bajpai, former IAS officer Vineet Nayyar, Malini Shankar and Nanda Kishore.
 
Source: Businessline, Money Control, other media reports 

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