An anonymous whistleblower, who claimed to be part of the senior management at Deloitte, said he is “privy to several internal irregularities in providing professional services to IL and FS.”
Mumbai:
On how the audit firm benefited the IL&FS by helping the failed group fudge its accounts year after year, the anonymous whistleblower said the Haskins and Sells LLP (Deloitte) ensured a clean chit to the firm even when the RBI claimed to have red flagged a few issues and asked it to reduce its outstanding debt.
The whistleblower said that the “extent of the scam is mind boggling” and hoped that investigation agencies would question members of the audit team, thereby giving him a chance to disclose how “the senior management at Deloitte is aware of the financial mismanagement and impropriety by the IL&FS group” and actively helped fudge facts.
Deloitte has an internal reporting system, but the whistleblower said: “I have no faith in the current leadership and, hence, am consciously not resorting to our internal whistle-blowing mechanism.” Deloitte has audited IL&FS Financial Services Ltd (IFIN), the lending arm of IL&FS, for 10 years and remained the auditor until it completed 10 years in 2018. The audit report had absolutely no adverse findings even in 2017-18.
The new IL&FS management headed by banker Uday Kotak said that 90 per cent of the loans advanced by IFIN had turned bad. Among other allegations the whistleblower said that Deloitte was a beneficiary of IL&FS’s “unmitigated growth” over the decade in multiple ways.
It enjoyed a “preferred advisor role” and was awarded several advisory contracts on a “single sourced basis” at “substantially high fees” as compensation, the whistleblower said. When audit findings would not show IL&FS in a “favourable light” and Deloitte had to take a position, the auditor conveniently relied on “management explanations and comfort letters by compromising on its independent opinion.”
On several occasions, the IL&FS’s top management would meet and “coerce Deloitte partners for a more favourable position or watered-down position”, he said, adding that this was in addition to the “watering down of views” that already happened internally at Deloitte.
On how the audit firm benefited the IL&FS by helping the failed group fudge its accounts year after year, the anonymous whistleblower said the Haskins and Sells LLP (Deloitte) ensured a clean chit to the firm even when the RBI claimed to have red flagged a few issues and asked it to reduce its outstanding debt.
The whistleblower said that the “extent of the scam is mind boggling” and hoped that investigation agencies would question members of the audit team, thereby giving him a chance to disclose how “the senior management at Deloitte is aware of the financial mismanagement and impropriety by the IL&FS group” and actively helped fudge facts.
Deloitte has an internal reporting system, but the whistleblower said: “I have no faith in the current leadership and, hence, am consciously not resorting to our internal whistle-blowing mechanism.” Deloitte has audited IL&FS Financial Services Ltd (IFIN), the lending arm of IL&FS, for 10 years and remained the auditor until it completed 10 years in 2018. The audit report had absolutely no adverse findings even in 2017-18.
The new IL&FS management headed by banker Uday Kotak said that 90 per cent of the loans advanced by IFIN had turned bad. Among other allegations the whistleblower said that Deloitte was a beneficiary of IL&FS’s “unmitigated growth” over the decade in multiple ways.
It enjoyed a “preferred advisor role” and was awarded several advisory contracts on a “single sourced basis” at “substantially high fees” as compensation, the whistleblower said. When audit findings would not show IL&FS in a “favourable light” and Deloitte had to take a position, the auditor conveniently relied on “management explanations and comfort letters by compromising on its independent opinion.”