deloitte: ED searches Mumbai offices of Deloitte India, KPMG unit

The Enforcement Directorate searched the offices of the former auditors of IL&FS Financial Services (IFIN) on Wednesday, nearly three years after the federal agency filed a money-laundering case over alleged financial irregularities at Infrastructure Leasing and Financial Services (IL&FS) and its group companies.The ED searched the Mumbai offices of Deloitte Haskins & Sells (DHS), the Indian arm of Deloitte, and KPMG associate firm BSR & Co. DHS had rotated out as IFIN’s auditor in fiscal 2018,while BSR resigned from the role in June 2019 after allegations of irregularities at the non-bank finance company came to light.

Other than the official premises, ED teams reached the residence of two partners who had signed off on the audit reports – Udayan Sen, who has since retired from Deloitte, and N Sampath Ganesh of BSR – and questioned them about the processes and methodologies followed in the audits. At least three agencies – the Serious Fraud Investigation Office (SFIO), Income Tax department and the ED – are probing the NBFC.

The ED carried out the searches days after the government notified changes to the Prevention of Money Laundering Act, bringing practicing chartered accountants, company secretaries and cost and works accountants carrying out financial transactions on behalf of their clients into the ambit of the anti-money-laundering law.

“There are certain audit irregularities that have been found in the books of IFIN and this requires clear explanation from the auditors. Searches were conducted as a part of the investigation into the case to ascertain their roles,” said an official privy to the investigation.

When asked if the raids were linked to the recent notification, the official said since such searches were deemed as procedures in ongoing investigations, the agency could always go with the assumption that the notification was retrospective in nature, unless challenged legally in the future stages of the probe.

“Also, the said probe is underway and not yet closed by the agency, so the question of whether the notification has been applied retrospectively will be a question taken up by the adjudicating authority or the courts,” the official explained, adding: “The notification strengthens the ED to probe the role of those who audited the books and also bring them under the ambit of a money-laundering probe.”

According to officials in the know, ED’s teams reached Deloitte’s office at Indiabulls Finance Centre in Lower Parel and KPMG’s office at Nesco Center, Goregaon early morning and started quizzing the audit teams. They also recorded the statements of the professionals involved in auditing IFIN, the officials said.

A Deloitte spokesperson said: “This routine inquiry is in respect to an ongoing matter regarding a former client and we continue to extend our full cooperation to authorities.”

A KPMG statement said it has co-operated and provided all necessary support to ED.

Source link

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top