The Serious Fraud Investigation Office (SFIO) To Grill IL& FS Independent Directors, Others

New Delhi: The Serious Fraud Investigation Office (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 Ministry of Corporate Affairs (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 independent Directors, experts, and consultants will be questioned. Everybody who is associated with the decision-making process- board, management and committees, including the risk management and audit panels, will be questioned”, one source said. US auditor firm Deloitte, along with its Indian partner, has already been questioned by the SFIO. Deloitte has audited the IL&FS group over the last 10 years. According to the sources, the SFIO sees Deloitte 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 audit 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 canceled, 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”. (IANS)

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