IL&FS case: SC allows reopening of last five years' accounts

New Delhi: The Supreme Court on Tuesday gave a free hand to the SFIO to reopen and recast IL&FS' books of accounts for the last five years.

The apex court had, on May 10, stayed a National Company Law Appellate Tribunal (NCLAT) order on reopening of the company's books but on Tuesday, vacated its stay.

The ruling comes as a major setback for the previous management of IL&FS, including former Managing Director, Hari Sankaran, who moved the top court challenging the NCLAT order on the grounds it was basically ex-parte and his version was not taken into consideration.

Sankaran has been arrested by the Serious Fraud Investigation Office (SFIO) during its investigation into loan defaults of IL&FS and the connected group companies.

The NCLAT had ordered reopening of the books of accounts and recasting financial statements of IL&FS Ltd, IL&FS Financial Services Ltd and IL&FS Transportation Networks Ltd for the previous five years.

Meanwhile, having initiated a crackdown on a suspected coterie of fraudsters in the IL&FS case, the government's financial fraud probe agency SFIO has recommended necessary action against the guilty auditors and also a detailed internal investigation by the RBI to identify reasons for the delay in detecting the lapses.