According to local media reports, the Indian National Company Law Tribunal has granted a petition by the Ministry of Corporate Affairs to ‘implead’ [bring into the lawsuit and potentially but not necessarily, prosecute] a total of 22 more parties involved in the alleged financial misappropriations in the IL&FS scandal, bringing the total number, individual and corporate, to 343. This latest move will also see auditors at Deloitte and KPMG affiliate BSR & Associates face proceedings. According to Economic Times and Business Standard, the news was broken through an order posted on the NCLT website on 18 July.
Separately, it has also been revealed that IL&FS has completed first phase of forensic audit on the credit rating agencies engaged with group companies in last 10 years. This audit evaluates the role of CRAs in rating various debt instruments and facilitating excessive borrowings from money markets across group companies that eventually led to defaults.
The board had appointed Grant Thornton to undertake a forensic audit on CRAs. Grant Thornton has submitted its findings in an interim report to IL&FS. The report analyzed several email communications between the group’s previous management and the representatives of credit rating agencies during the specified period.
During the period under review, Care, Icra, India Ratings and Brickwork were the main rating agencies for IL&FS Transportation Networks, IL&FS Financial Services and IL&FS. Brickwork was introduced in ITNL and IFIN from 2016, replacing Crisil, during these 10 years, the company said.
