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IL&FS case: SFIO recommends action against auditors, action for recovery of losses

The huge scam came to light last year after IL&FS and its subsidiaries defaulted on several debt repayments due to a severe liquidity crisis.

June 04, 2019 / 05:04 PM IST

Having initiated a crackdown on a suspected coterie of fraudsters in the IL&FS case, the government's financial fraud probe agency SFIO has recommended necessary action against the guilty auditors and also a detailed internal investigation by the RBI to identify reasons for the delay in detecting the lapses.

The Serious Fraud Investigation Office (SFIO) has also recommended a necessary action as per the Companies Act by the current management of IL&FS Financial Services (IFIN) for recovery of the losses suffered by the company due to the fraudulent conduct of the coterie, officials said.

In its first chargesheet, the SFIO has identified a nine-member coterie behind the huge financial fraud at IFIN, which it alleged connived with the statutory auditors and some independent directors to defraud the company while running it as a personal fiefdom.

The chargesheet has been filed after an extensive probe into the affairs of IFIN, a subsidiary of Infrastructure Leasing and Financial Services (IL&FS), while similar probes are underway for other group entities including the parent firm that ran into deep financial trouble last year after it was found to have amassed huge stressed loans totalling over Rs 90,000 crore.