Even as Deloitte Haskins and Sells remains perched precariously on the high wire over its questionable role in the IL&FS audit process, it appears that the Ministry of Corporate Affairs may invoke section 140 (5) of the Companies Act to debar the firm for alleged malpractice in IL&FS accounts. This extreme action is being warranted after Deloitte’s alleged misdemeanours and conduct in the IL&FS case.
If this were to happen, it will be the second such instance after Price Waterhouse was nailed in the Satyam scam.
[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Deloitte spokesperson told to leading media agency: “The investigations on the company IFIN are in progress and we are cooperating fully. We reaffirm that we have conducted our audits in accordance with the Standards on Auditing and applicable laws and regulations.”[/perfectpullquote]
Deloitte on its part contends that the Group’s defaults began in May 2018. The three principal arms of IL&FS Group – IL&FS, ITNL and IFIN — according to sources within Deloitte saw SRBC &CO (E&Y) audit two of the firms in both 2017-18 and 2018-19, namely IL&FS and ITNL. BSR (KPMG) in 2018-19 DHS (Deloitte) and BSR (KPMG) meanwhile audited IFIN.
In 2016-17 DHS audited IL&FS, ITNL along with SRBC &Co (E&Y) and IFIN on its own. Of course, till 2015-16 for many years DHS audited all three Group entities.
Deloitte has claimed that they did not audit the financial statements of 111 subsidiaries, 36 jointly controlled entities, 11 associates in 2016-17, or the financial information of 13 subsidiaries, two jointly controlled entities or six associates.