RAISING questions of round-tripping through a maze of firms, an influential Pune-based businessman received over Rs 52 crore from an IL&FS (Infrastructure Leasing & Financial Services Ltd.) group company which he then used to repay his initial loan to the very same IL&FS company. That businessman is Sarang Kale and two of his companies figure in the chain of transactions red-flagged in the forensic audit conducted by Grant Thornton.
The true financial cost of Covid-19 is something India would rather not acknowledge, let alone bear — at least not until the pandemic has played out. That explains why the central bank on Thursday allowed a one-time restructuring of corporate and personal loans that have been under stress ever since Prime Minister Narendra Modi put the country under a severe lockdown in March.
Grant Thornton India uncovered irregularities in the operations and financial management of IL&FS Transportation Networks India (ITNL) and its special purpose vehicles (SPVs), it alleged in a report on the roads unit of the IL&FS network. It also alleged rigging of bids and said lenders extended loans despite being aware of the company's precarious financial condition. Infrastructure Leasing & Financial Services (IL&FS) defaulted on payments in September 2018, triggering a crisis in the shadow banking system. The government-chosen board that took over IL&FS asked Grant Thornton to conduct a forensic audit of ITNL. The board declined to comment when asked what action had been taken against the erstwhile management
Non-banking financial companies' access to funds is probably in its best shape since the implosion of IL&FS even as the borrowing cost has also come down, the Reserve Bank of India said. This is a significant shift from the view in the RBI's financial stability report released in July, which had flagged continued liquidity concerns for NBFCs. "The NBFC sector, which was in stress post IL&FS and throughout early part of 2019, has now access to funding at reasonable cost," RBI governor Shaktikanta Das said Thursday "Market financing conditions for NBFCs, which had become challenging, have largely stabilised in the wake of targeted policy measures."
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.