Centre to Court: Deloitte wrongly interpreting law to contest 5-year ban
Deloitte Haskins & Sells LLP, the local auditing affiliate of international accounting group Deloitte Touche Tohmatsu, is misinterpreting an important law as it seeks to avoid a five-year ban on new business, the government has informed the National Company Law Tribunal.
The Ministry of Corporate Affairs has proposed the ban on the auditor for its alleged involvement in a financial fraud.
The Ministry said it had noticed many violations of auditing standards by Deloitte and a KPMG affiliate during an investigation of an alleged fraud at IFIN, a unit of Infrastructure Leasing & Financial Services, whose debt defaults in 2018 revealed a financial scam.
The auditors have denied any wrongdoing or cover up in the matter. Deloitte also contends that the government's case against it does not stand, because the charges have been levelled after its 10-year stint at IFIN ended. Deloitte last audited IFIN for fiscal year to March 2018.
It argued that the call for ban was unjustified as the government was taking into account its previous work.
However, the Ministry says that any fraud, which is in continuity, can come under the purview of the law.
The Ministry, in its June 28 filing with the Tribunal, countered that the auditor was not correctly interpreting the laws in place and any law cannot be read in such a "narrow and pedantic manner". IANS