"The firm stands fully for its audit work which has been conducted in full compliance with the professional standards in India," Deloitte said.KPMG affiliate BSR said it was studying the government's tribunal filing and would "defend our position in accordance with the law", adding: "BSR's audit of IFIN was performed in accordance with the applicable auditing standards and legal framework. "IL&FS did not respond to a request for comment.The National Company Law Tribunal on Monday asked Deloitte and the KPMG affiliate to file their responses on the allegations, setting June 21 as the next hearing date, said Sanjay Shorey, director for legal prosecution at the corporate affairs ministry.The government has urged the tribunal to impose a five-year ban on the two auditors. Then, to avoid classifying them as bad loans, it lent funds to the defaulters' group companies that were used to repay the earlier loans, the filing said.There were 88 instances of loan disbursals and repayments with an amount totalling 92.8 billion rupees ($1.33 billion). "The auditors, despite being aware of this modus operandi of fraudulently funding of principal and interest to the defaulting borrowers, had not reported the same in the audit report," the government alleged in the court filing.IFIN also raised funds through debentures: its 2017-18 financial statements showed it had borrowed around 51 billion rupees ($733 million) over the years. "IFIN may only (be) the tip of the iceberg, as the rest of the IL&FS Group companies are still under investigation," the government filing said.

Source: Economic Times June 13, 2019 13:07 UTC