KPMG Network Firm BSR & Associates Quits As IFIN Auditor Just A Day Before National Company Law Tribunal Hearing

BSR & Associates has resigned as an auditor of IL&FS Financial Services (IFIN) which is being probed by multiple agencies for alleged financial irregularities.

The announcement came a day before a hearing at the National Company Law Tribunal (NCLT) where the government had sought a ban on BSR and fellow auditor Deloitte Haskins & Sells for their alleged role in concealing bad loans at IL&FS and its group firms, including IFIN.

BSR & Associates, which is part of global accounting firm KPMG’s network in India issued a press release which stated that had filed its written response to a notice issued by the newly reconstituted IL&FS board on May 24, 2019.

The release stated that BSR & Associates had provided explanations during a meeting held with IFIN on May 29, 2019. “While IFIN has not communicated its decision to us as yet, we do not intend to impose ourselves as auditors of the company,” the BSR & Associates stated.

The government has sought a five-year ban on both Deloitte and BSR & Associates which audited IFIN, invoking a provision in the Companies Act. If the plea is accepted, it would prevent both firms from auditing any listed or unlisted company in India.

The Ministry of Corporate Affairs had also sought the removal of both BSR and Deloitte as auditors of IFIN.

If the NCLT accepts the government plea, IFIN would have to first appoint an auditor, which could happen only through the NCLT, as per current regulations.