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 guilty auditors and also a detailed internal investigation by the RBI to identify the reasons for the delay in detecting the lapses.
The Serious Fraud Investigation Office (SFIO) has also recommended 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 charge sheet, the SFIO had 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.
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The charge sheet 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 ₹90,000 crore. The SFIO said it was observed that the RBI, in its inspection reports 2015 onwards, had repeatedly pointed out to the non-compliance to group exposure norms at IFIN.