Is the Govt banning Deloitte, KPMG arm for five years?

Alleging lapses in the audits of a unit of Infrastructure Leasing & Financial Services (IL&FS), India is seeking to ban Deloitte Haskins Sells and KPMG affiliate BSR & Associates for five years.

India's corporate affairs ministry told a company law tribunal that the companies "miserably failed" to fulfill their duties as auditors for IL&FS Financial Services (IFIN).

Both the auditing firms however denied any wrongdoing.

Deloitte said that it "is confident that it has been thorough and diligent in the performance of its duties as an auditor. The firm stands fully for its audit work which has been conducted in full compliance with the professional standards in India."

It said it would cooperate fully with authorities.

BSR said that its "audit of IFIN was performed in accordance with the applicable auditing standards and legal framework", adding it would defend itself "in accordance with the law".

The Indian government took control of IL&FS in October after it defaulted on several debt obligations, saying it stepped in to insulate the financial system from contagion. The group has a debt of more than 910 billion rupees ($13.1 billion).

Last month government investigators filed fraud charges against IFIN, its former management as well as the auditors.

Deloitte audited IFIN from 2008-09 to 2017-18 and BSR started auditing it from 2017-18, the petition says. Both Deloitte and BSR audited IFIN in 2017-18.