For four weeks: NCLT stays own order to prosecute IL&FS auditorshttps://indianexpress.com/article/business/companies/for-four-weeks-nclt-stays-own-order-to-prosecute-ilfs-auditors-5852807/

For four weeks: NCLT stays own order to prosecute IL&FS auditors

The NCLT gave the audit firms time till July 28 to file an appeal, according to the order uploaded on tribunal’s web portal.

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The NCLT will next take up the IL&FS matter for hearing on August 6.

The National Company Law Tribunal (NCLT) on Thursday stayed its own July 18 order to implead Deloitte Haskin & Sells and BSR & Associates in the IL&FS proceedings. The NCLT gave the audit firms time till July 28 to file an appeal, according to the order uploaded on tribunal’s web portal.

The legal counsel of Deloitte Haskin & Sells had last week moved the tribunal seeking a four-week stay on the order passed by the tribunal to implead the auditors of IL&FS Financial Services (IFIN) in the tribunal’s proceedings against IL&FS for operational mismanagement.

On July 18, in response to an application filed by the Ministry of Corporate Affairs, the NCLT had passed an order to implead 23 additional respondents, including the auditors of IFIN — Kalpesh Mehta and Udayan Sen of Deloitte and Sampath Ganesh of BSR.

The government had in June filed an application to freeze assets of the additional respondents.

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These applications were filed by the Ministry of Corporate Affairs based on the findings of the Serious Fraud Investigation Office (SFIO) in the IL&FS fraud case.

The SFIO had on May 30 filed a criminal complaint based on its probe into the affairs of IL&FS. The findings showed that the auditors were hand in glove with the former management in concealing material facts and information from investors and creditors.

Following the SFIO findings, the MCA also filed an application seeking to ban the two audit firms from conducting auditing activities for five years. The NCLT over the past two weeks heard arguments and reserved the order in the matter.

The NCLT will next take up the IL&FS matter for hearing on August 6. The affairs of the IL&FS group first came into scrutiny last year after it had defaulted on short-term and long-term debt obligations to the tune of Rs 91,000 crore. —FE