Government Seeks National Company Law Tribunal’s Nod To Freeze Assets Of IL&FS Arm Audit Partners Deloitte, BSR

The Ministry of Corporate Affairs (MCA) has sought the National Company Law Tribunal’s (NCLT’s) nod to freeze the assets and bank lockers of Deloitte Haskins & Sells as well as KPMG-network auditor BSR & Associates.

In this connection, it may be recalled that both these former auditors of IL&FS Financial Services (IFIN) were named in a recent Serious Fraud Investigation Office (SFIO) complaint.

After hearing the MCA’s argument, the NCLT had adjourned the matter till August 28 since its order permitting prosecution of the auditors was stayed by the National Company Law Appellate Tribunal (NCLAT) earlier.

The Mumbai Bench of the NCLT categorically recently stated that it won’t pass any order in the case until the NCLAT decides on whether permission should be granted to the MCA to prosecute the auditors of IL&FS.

However, the counsel for the auditors objected to the MCA’s plea, stating that they were no longer party to the case, since the NCLAT had stayed the NCLT order giving permission to the ministry to prosecute them.

Earlier, the NCLT had barred former IL&FS directors from “creating third-party rights, mortgaging or alienating movable and immovable assets fully or partly owned”.

The MCA had prayed to the NCLT to extend the same order to audit firms and their partners named in the SFIO complaint and other individuals, but the MCA had stated that it was necessary to do so in order to prevent diversion of funds.