IL&FS case: HC stays proceedings against audit firm BSR at NCLT

The Bombay High Court on Wednesday stayed proceedings against BSR and Associates LLP, former auditor of IL&FS Financial Services, before the National Company Law Tribunal.

BSR had moved the court challenging the validity of the central government's plea before the NCLT seeking a ban on the audit firm for five years under the Companies Act, 2013.

The government has sought ban on BSR for its role in alleged financial irregularities at the crisis-hit IL&FS Group.

The NCLT was scheduled to begin hearing the plea on September 5.

On Wednesday, a bench of Justices Ranji More and N J Jamadar stayed the NCLT proceedings until further orders and directed the Ministry of Corporate Affairs to file its reply to BSR's plea within four weeks.

The court also directed the Serious Fraud Investigation Office (SFIO), a central agency which is a party in the case, to file its reply within four weeks.

In June, the ministry moved the NCLT against BSR and some other external auditors of IL&FS alleging professional misconduct.

At the time, it had also directed the SFIO to initiate a probe against such audit firms.

The SFIO had subsequently claimed that BSR and some other audit firms had acted in breach of auditing standards and that they had failed to detect financial inconsistencies at IL&FS.