Fraudulent activities at the crisis-ridden IL&FS were long-running and could have come to light much earlier, in 2017, but for a cover-up job on a whistleblower complaint by the top management in connivance with independent directors, an SFIO investigation has revealed.

The detailed probe by the Serious Fraud Investigation Office (SFIO) into the affairs of IL&S Financial Services (IFIN) has revealed a plethora of lapses, violations, ever-greening of loans, deliberate delay in recoveries and even a whistleblower complaint brushed aside by the then management in 2017.

As a multi-pronged strategy is implemented for the revival of the ailing group and to bring to book the perpetrators of the fraud, the earlier audit committee of IFIN has been found at fault on multiple occasions.

Analysis of e-mails and information collected from personnel and other sources have revealed that a whistleblower complaint was received in early 2017, according to officials.

However, the audit committee, which is required to have an oversight on the vigil mechanism at the company, failed to act properly with respect to the complaint, they added.

Citing the SFIO investigation report, which is part of a chargesheet filed by the government’s white-collar investigation agency in this case, officials said the IFIN management was aware of the whistleblower complaint that was received in March 2017 but the audit committee discussed it only in December 2017. Further, the investigation found that the audit committee simply went by the management version and did not inquire into the allegations made in the whistleblower complaint.

Auditors’ lapsesp16