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SFIO to grill IL&FS independent directors, others: Sources

IANS  |  New Delhi 

The (SFIO) will shortly question former independent directors of IL&FS, as well as experts and consultants associated with the crisis-ridden company for allegedly failing to raise issues concerning its vital interests, official sources here said on Wednesday.

An agency under the (MCA), the SFIO has already questioned the IL&FS auditors, key managerial personnel and its credit rating agencies in this regard.

"We will go step by step. Auditors, KMPS (key managerial personnel) and credit rating agencies have been questioned. Next, the indpendent Directors , experts and consultants will be questioned. Everybody who is associated with the decision making prpocess- board, management and committees, including the risk management and panels, will be questioned", one source said.

US firm Deloitte, along with its Indian partner, has already been questioned by the SFIO.

has audited the IL&FS group over the last 10 years. According to the sources, the SFIO sees as having agreed to rely on management explanations and comfort letters, thereby compromising on its independent opinion.

The SFIO is pursuing the line of investigation that these professional managers and panels failed to raise the red flag on the company's mismanagement and lapses, and also did not question the board on issues leading to the massive defaults.

Queried on what action the government could take in case of the auditors, and if their licenses would be cancelled, an MCA source said: "What action the government can take against the auditors depend on the outcome of the SFIO investigation. It would depend on how the auditors are able to present their case..whether they are able to prove that they had done the due diligence, cross-verified facts and figures presented by the board and had raised an alarm".

"What action can be taken depends upon what evidence is produced in the investigation report and what sort of violations have been committed, the gravity of the offence. Prima facie there is enough material to look into the affairs of the auditors", the source added.

Among the company's independent directors in the company's board during the period in question, were the R.C. Bhargava, former bureaucrat Michael Pinto, and Jaithirth Rao, formerly of

(Anjana Das can be contacted at anjana.d@ians.in)

--IANS

ana/sn/bc

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, May 15 2019. 15:06 IST
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