The Supreme Court has refused to intervene in a recent Bombay High Court order which gave relief to KPMG network firm, BSR & Associates LLP, in the IL&FS Financial Services (IFIN) case.
Earlier, the Ministry of Corporate Affairs (MCA) had moved the Supreme Court after the Bombay High Court granted a stay on National Company Law Tribunal (NCLT) proceedings against BSR & Associates LLP, until further orders.
The government has sought a five-year ban on audit firms KPMG and Deloitte for their alleged roles in the IL&FS imbroglio.
The Supreme Court also stated that these directions have been passed so that the matter could be taken up for final disposal by the high court in October.
Earlier, a division bench of the Bombay High Court had stayed NCLT proceedings against KPMG’s BSR and Deloitte. Prior to this development, the NCLT had ruled that it had the jurisdiction to ban both Deloitte as well as BSR for five years each.
It may be recalled that investigations by the MCA’s probe agency had alleged a fraud and estimated that it involved a sum of more than Rs 90,000 crore.
The government had also told the Supreme Court that IL&FS Financial Services (IFIN) had passed a resolution to appoint Mukund M Chitale & Co as statutory auditors, after which the audit firm had expressed its inability to take up the assignment.
Under such circumstances, the board would have to propose the name of a new audit firm which would have to be approved by the NCLT.
Solicitor General of India Tushar Mehta represents the government along with L Vishwanathan of Cyril Amarchand Mangaldas, while BSR and its partners are represented by senior counsel Mukul Rohatgi and Darius Khambata, besides VP Singh of AZB & Partners.