Services of Deloitte in India is about to Ban for 5 years by MCA

Services of Deloitte in India is about to Ban for 5 years by MCA

The discrepancy of $91,000 crores in Deloitte audit report for the financial year 2019, If reports are to be believed Ministry of Corporate Affairs may invoke section 140 (5) of the Companies Act to debar the firm for alleged malpractice in IL&FS accounts. 

What Section 140 of The Companies Act States

Without prejudice to any action under the provisions of this Act or any other law for the time being in force,an application made to it by the Central Government or by any person concerned, if it is satisfied that the auditor of a company has, whether directly or indirectly, acted in a fraudulent manner or abetted or colluded in any fraud by, or in relation to, the company or its directors or officers, it may, by order, direct the company to change its auditors.

So, in case this was to happen it would be second such instance since PriceWaterhouseCoopers which was nailed in the Satyam scam.

Replying to the charges a spokesperson for Deloitte said, “The investigations on the company IFIN are in progress and we are cooperating fully. We reaffirm that we have conducted our audits in accordance with the standards on auditing and applicable laws and regulations.”

The firm didn’t audit the group when the defaults started in May 2018, Deloitte maintained. IL&FS, IL&FS Transportation Networks Limited (ITNL) and IL&FS Financial Services Limited (IFIN) were being audited by other firms, it added.