The National Financial Reporting Authority (NFRA) has barred another auditor for five years for alleged professional misconduct in the statutory audit of IL&FS Financial Services (IFIN) for 2017-18. The watchdog has also slapped a fine of Rs 15 lakh on Shrenik Baid, who was a partner in the statutory audit. Baid is at least the third auditor against whom action has been taken by NFRA in the IFIN matter. Deloitte Haskins and Sells LLP conducted the statutory audit of IFIN for 2017-18.
The National Financial Reporting Authority (NFRA) order to debar Deloitte's Udayan Sen has set the alarm bells ringing across the audit firms currently under the investigation of the regulator. Audit firms and their lawyers are studying the 88-page order to understand the regulator's observations and get a sense of which way the NFRA's decision could swing in their case
In the past 22 months, since the Rs 99,000-crore default by Infrastructure Leasing and Financial Services (IL&FS), debt fund managers earning high returns for investors by taking credit risk have mellowed down substantially. Latest numbers from the mutual fund industry show that they are investing much more in safe instruments like G-Secs, PSU debt, T-bills, and others. For example, industry's total allocation to G-Secs, PSU debt, and T-bills stood at 17.4 per cent in August 2018, and at the end of June 2020, it had more than doubled to 37.3 per cent. The data also reveals that during the same period, the debt fund industry's assets under management have barely grown less than 1 per cent from Rs 14.75 trillion to Rs 14.87 trillion.
The National Financial Reporting Authority (NFRA) has debarred Udayan Sen, a chartered accountant and a former CEO of Deloitte India, for seven years for professional misconduct as an engagement (or signing) partner in the statutory audit of beleaguered IL&FS Financial Services Ltd (IFIN) for 2017-18. An order issued by NFRA on Wednesday also slapped a penalty of Rs 25 lakh on Sen.
The national audit regulator has debarred Udayan Sen, former CEO of Deloitte India, for seven years and slapped a penalty of Rs 25 lakh for his role in "omissions/misstatements" in the audit of fraud-hit IL&FS Financial Services. "Udayan Sen is debarred for the period of seven years from being appointed as an auditor or internal auditor or undertaking any audit in respect of financial statements or internal audit of the functions and activities of any company or body corporate," National Financial Reporting Authority (NFRA) said in a statement on Wednesday.
The government-appointed board of failed finance and infrastructure group IL&FS has said that it now expects to recover more than it earlier estimated from the resolution of assets. In October 2019, IL&FS board chairman Uday Kotak had said that the management expects to recover and resolve around half the outstanding debt of Rs 99,000 crore. As against this, the board now projects to address Rs 57,000 crore of debt.
The New Board of IL&FS Limited today shared an update on the progress of the ongoing resolution process across the Group and revised its estimates of debt being addressed to well above 50 per cent of the overall debt of over Rs 99,000 crore.
The New Board had to navigate through complex issues post taking charge on Oct 4, 2018: • 347 entities - 172 domestic, 175 foreign • 99,000+ Cr debt (funded and non funded) with high leverage • Multiple business verticals, 4 layered structure, numerous jurisdictions • Significant intra-group exposure with risks not commensurate with revenue streams
The National Financial Reporting Authority (NFRA) has observed that BSR & Associates did not adhere to standards while scrutinising the accounts of IL&FS Financial Services Ltd (IFIN) in a draft audit quality review, said people with knowledge of the matter. The agency has sought the KPMG India affiliate's comments, they said. BSR and NFRA did not respond to ET's queries. The NFRA, established by the ministry of corporate Affairs (MCA) to monitor and enforce accounting and auditing standards, hasn't made the report public but could do so in the weeks to come, said the people cited above.