NCP leader Jayant Patil summoned by ED in IL&FS case
ED had initiated investigation in the IL&FS case on the basis of FIR filed by EOW, Delhi and a complaint filed by SFIO, Mumbai against ILFS Group of Companies and their key managerial personnel.
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Nationalist Congress Party (NCP) State President Jayant Patil has been summoned by the Enforcement Directorate (ED) in connection with a case pertaining to alleged irregularities related to Infrastructure Leasing & Financial Services (IL&FS). Patil has been asked to appear before the probe agency on May 12.
Earlier in the money laundering investigation related to IL & FS, Raj Thackeray from NS had been summoned and questioned by ED in loans given to Kohinoor construction.
The investigation pertains to alleged irregularities in IL&FS Group's loan and equity investment in Kohinoor CTNL, which is one of the defaulters. Kohinoor CTNL is developing the Kohinoor Square tower in Dadar (West).
Case against IL&FS
ED had initiated investigation in the IL&FS case on the basis of FIR filed by EOW, Delhi and a complaint filed by SFIO, Mumbai against ILFS Group of Companies and their key managerial personnel. On Wednesday various premises of some four organisations including Deloitte and KPMG were searched by ED officials. In the same case, ED had summoned and recorded statement of MNS Chief Raj Thackeray in August 2019.
Audit firms that conducted audit of IL&FS under scanner
During the course of investigation by ED, it was revealed that Statutory Audit of IL&FS Financial Services Ltd (IFIN), Group Company of ILFS Group, has been made by Deloitte Haskins & Sells LLP for the period from FY 2008-09 to 2017-18 and by BSR & Associates for the period from FY 2017-18.
Udayan Sen (CA) and Kalpesh Mehta (CA) were the engagement partners of Deloitte Haskins & Sells LLP and N Ganesh Sampath was the engagement partner of BSR & Associates. M/s Deloitte Haskins & Sells LLP and M/s BSR & Associates LLP were appointed by IFIN to make statutory audit of IFIN and to identify errors, omissions and irregularities in books of accounts of company and to ensure financial statements of the company are in compliant with widely accepted accounting rules.
ED suspicion on auditors linked to two big 4 firms
ED is suspecting that auditors of M/s IFIN (M/s Deloitte Haskins & Sells LLP and M/s BSR & Associates LLP) were aware of funding provided by IFIN to defaulting borrowers through their group companies repeatedly. The auditors were also aware of the NPA of IFIN, suppression of provisioning of NPA, non-write off of loan loss investments by IFIN and other dubious and illegal practices being adopted at IFIN through the coterie of the key managerial personnel of IFIN.
The auditors despite being aware of all the dubious and illegal practices adopted by the Key Managerial Personnel (KMPs) of IFIN for their own personal illegal gain did not report the same despite being statutorily obliged to do so. This led to the auditor conniving and colluding with the key managerial personnel of IFIN to conceal material information and in knowingly and fraudulently falsifying the books of accounts and financial statements from FY 2013-14 to FY 2017-18.
The auditors deliberately and knowingly did not report the true state of affairs of the company and helped in ever-greening of loans availed ILFS Group, which resulted in causing loss to the creditors of the company who had lent and invested in the NCDs of the company.
Further, SFIO has also made Udayan Sen, Kalpesh Mehta, N Sampath Ganesh, Deloitte Haskins & Sells LLP and M/s BSR & Associates LLP accused in their complaint.