The National Company Law Appellate Tribunal (NCLAT) rejected the pleas of Deloitte, KPMG, and Auditors against the impleadment fraud in the IL&FS subsidiary.
In the case of Deloitte Haskins & Sells LLP vs. Union of India, the appellate tribunal retreated that the interim order passed by the National Company Law Tribunal (NCLT) will be in operation for another 2 weeks.
The Ministry of Corporate Affairs (MCA) has requested the National Company Law Appellate Tribunal (NCLAT) to freeze the assets of the former auditors in the fraud case including alleged fraud case in IFIN, which is the subsidiary of the ‘Infrastructure Leasing and Financial Service Limited’ (IL&FS).
The auditors and directors of the company commented that they do not form the part of management, which is primarily responsible for managing the affairs of the company and therefore should not be charged.
The issue raised in this case was whether the auditors and directors of the company are liable to be charged in the fraud case or not?
The two-member bench of National Company Law Appellate Tribunal (NCLAT) comprising of Chairperson Justice S J Mukhopadhaya and a Judicial Member Justice Bansi Lal Bhat keeping in view the principle of natural justice, the public interest and to save the economy of the country from collapse rejected the contention of the auditors and directors of the company and held that the interim order passed by the National Company Law Tribunal (NCLT) will be in operation for another 2 weeks.
The tribunal highlighted various acts prejudicial to the public interest which have cascading impact on various sectors of the economy. The red signals are raised against the IL&FS by the country and even by the department of economic affairs of the country.
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