BSR & Associates resigns as statutory auditor of IL&FS Investment Managers

IL&FS Investment Managers said Friday that audit firm BSR & Associates LLP has resigned as the statutory auditors of the company.

"We hereby inform that BSE & Associates have resigned as the statutory auditors of the company," it said in a regulatory filing.

The announcement has come a day after BSR & Associates, a KPMG group associate, resigned as statutory auditor of IL&FS Financial Services (IFIN).

BSR & Associates in a letter to IL&FS Investment Managers has said that it has re-evaluated the client continuation of the company, according to the filing.

"As a part of this re-evaluation, the firm has considered recent development, including actions and investigations initiated by various regulatory authorities in relation to Infrastructure Leasing & Financial Services (IL&FS) and its affiliated companies," BSR & Associates said in the resignation letter to the company.

BSR & Associates expressed its inability to continue as the statutory auditors of the company with "immediate effect" and said the audit firm would help in transition to alleviate any inconvenience to IL&FS Investment Managers.

On Thursday, IL&FS Financial Services (IFIN) had announced that the KPMG associate audit firm quit as the statutory auditor of the company. BSR & Associates had mentioned that it would continue to defend itself in the NCLT on petitions filed by the MCA regarding banning audit firms for five years.

"We confirm that BSR & Associates LLP has resigned as auditors of IL&FS Financial Services (IFIN) on June 19, 2019. We had received a notice dated May 13, 2019 from the board of directors of IFIN seeking an explanation on our removal as auditors," IFIN said in a statement a day earlier.

Unfolding of the IL&FS debt crisis and alleged fraud has triggered action from multiple agencies including the Ministry of Corporate Affairs as well as the market regulator Sebi to probe on the role of a number of individuals, top management people, ratings agencies as well as audit firms in the matter that came to light from September 2018.

Sebi has been conducting an in-depth investigation into the role of several entities and individuals, including for suspected violation of disclosure and corporate governance norms.

The IL&FS and the group firms are entangled in huge defaults with an accumulated debt burden of over Rs 90,000 crore presently, which became the prime reason behind the current crisis in India's NBFC sector.