Govt. likely to ban Deloitte for alleged malpractice: Source Report

Apr 29 2019 11:55 AM
Govt. likely to ban Deloitte for alleged malpractice: Source Report

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. This Section essentially looks at the following:

To be noted that without prejudice to any action under the provisions of this Act or any other law for the time being in force, the Tribunal either suo motu or on an application made to it by the Central Government or by any person concerned, if it is satisfied that the auditor of a company has, whether directly or indirectly, acted in a fraudulent manner or abetted or colluded in any fraud by, or in relation to, the company or its directors or officers, it may, by order, direct the company to change its auditors. If this were to happen, it will be the second such instance after Price Waterhouse was nailed in the Satyam scam.

also read Diesel is unstoppable in price raise queue; check petrol and diesel rates inside

In January, 2018, nine years after the Satyam scandal stunned corporate India, SEBI banned Price Waterhouse (PW) from providing audit services to listed companies and market intermediaries for two years in the Satyam fraud. Two PW partners were banned for three years. The regulator also imposed a disgorgement of ₹130.9 million on Price Waterhouse, and two of its chartered accountants - S Gopalakrishnan and Srinivas Talluri.

The three entities also have to pay 12 per cent interest on the disgorgement amount since January 7, 2009, in 45 days from the date of the order. Further, it said that no listed company or intermediary registered with SEBI to be engaged with any audit firm associated with the PW network for issuing any certificate with respect to compliance of statutory obligations which SEBI is competent to administer and enforce, under various laws for a period of two years. These entities were charged under SEBI prohibition of Fraudulent and Unfair Trade Practices (FUTP) regulation.

When contacted, Deloitte spokesperson told IANS: "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." 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. IFIN meanwhile was audited by BSR (KPMG) in 2018-19 DHS (Deloitte) and BSR (KPMG).

also read Government to raise its import duty on Wheat to support farmers

© 2019 News Track Live - ALL RIGHTS RESERVED