Mumbai: The National Company Law Tribunal on Monday gave time until Friday to Indian affiliates of Deloitte and KPMG to put forth their defence, over the government’s petition that the auditors be banned for five years for allegedly conniving with the management of IL&FS Financial Services (IFIN).

The government had moved NCLT on June 10, seeking the ban on Deloitte Haskins & Sells, which is part of Deloitte, and KPMG India affiliate BSR & Associates.

On Monday, senior counsel Janak Dwarkadas and Amit Desai appeared for Deloitte while senior advocate Darius Khambata represented BSR & Associates.

The defence counsels said a firm could be banned only in a case where a final ruling was made and it was proved that the auditors abetted or colluded in a fraud. Merely filing a charge sheet is not enough, they said.


In a 32,000-page charge sheet filed by the Special Fraud Investigation Office (SFIO) of the ministry of corporate affairs (MCA), it was alleged that the auditors suppressed information on various loans, inflated profits and presented a rosy picture of the company.

NCLT sought responses from both the government and defence lawyers, and asked if they needed more time to argue the case. Sanjay Shorey, the director of legal prosecution at the MCA who was arguing for the government, said he was willing to represent his case, but did not object to the case being heard on Friday.

On Monday, NCLT also reserved its order on a plea filed by the wife and daughter of former IFIN managing director Ramesh Bawa to remove a freeze on their assets. The relatives of Bawa argued that since they were not party to the case, their assets must not be seized.

Investigation agencies had frozen assets as Bawa did not comply with the tribunal’s order to give information about his movable and immovable assets.

The interim report of the SFIO doesn’t have any mention of the wife and daughter of Bawa, their counsel said. “The only argument is that Ramesh Bawa has transferred about Rs. 4.84 crore in the account of his daughter which she is willing to return, as per the direction of the tribunal,” he told the NCLT.

The counsel said Bawa’s wife had operated a locker four times, but it was her personal locker and it was done in the normal course of action.

Countering this, MCA’s Shorey argued that the order of the tribunal had clearly mentioned that Bawa must divulge the details of all the movable and immovable assets including lockers held by him individually or jointly but so far, no such detail had been provided.


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