Road construction takes place near the IL&FS building, in Mumbai, India. (Photographer: Abhijit Bhatlekar/Bloomberg News)

ICAI Sets Up Panel To Study Systemic Issues In IL&FS Crisis

The Institute of Chartered Accountants of India today said that it has constituted a nine-member panel to study the systemic issues in the IL&FS crisis.

The ICAI set up a high power group that “would study the systemic issues in the IL&FS matter and suggest remedial measures and improvement in the system and any other matter incidental thereto”, it said in a release issued today. The nine-member ICAI panel is headed by SB Zaware and has two past ICAI Presidents — Ved Jain and Nilesh Shivji Vikamsey — as members.

According to an official at the institute, Jain was its president during the Satyam Computer Services crisis in 2009 and thus has experience of handling such situations. Like in the case of IL&FS, the government had superseded the board of erstwhile Satyam Computer which was embroiled in one of the biggest accounting frauds.

Also read: IL&FS Needs Rs 100 Crore Every Month To Stay Afloat, Says Official

The ICAI had sought explanation from audit firms that carried out statutory audit works at the IL&FS Group in the past few years. The chartered accountants’ apex body, which has more than 2.95 lakh members, has also written to the Reserve Bank of India, and the Serious Fraud Investigation Office seeking details about IL&FS issue.

On Wednesday, the ICAI said that based on the responses from the RBI and the SFIO, it would be fast-tracking its investigation into the role of member/firm of the institute allegedly involved in terms of the disciplinary mechanism.

The government on Oct. 1 superseded the board of IL&FS and appointed a six-member board—which selected Uday Kotak as the non-executive chairman. That came after the defaults at IL&FS, with 348 direct or indirect subsidiaries, rattled financial markets and sparked concerns over a liquidity crunch.

Also read: Finance Ministry’s Reading Of How Big The IL&FS Crisis Is