The investigation into dubious lending practices by India’s largest shadow banker, Infrastructure Leasing and Financial Services (IL&FS), has brought the reputation of auditors Deloitte Haskins and Sells, and BSR and Co (a KPMG affiliate) under a cloud, and their roles are being probed by numerous agencies.

BSR and Co has now resigned as an auditor for IL&FS subsidiary IL&FS Financial Services (IFIN) ahead of a hearing from National Company Law Tribunal, Economic Times reports.

The government had approached the tribunal for a ban on BSR and Deloitte for their alleged role in concealing bad loans at IL&FS and its group firms. It has for the first time invoked Section 140(5) of the Companies Act seeking a five-year ban that would keep both audit firms from working for listed or unlisted companies.

IFIN was audited by BSR in 2018-19 and jointly by BSR and Deloitte in 2017-18. Deloitte was the sole auditor in 2015-16 and 2016-17.

Also Read: India’s IL&FS board seeks ban on Deloitte

After the alleged financial irregularities came to light last year, the government replaced the IL&FS board with one headed by a well-known banker, Uday Kodak.

Also Read: Auditors under fire over India’s IL&FS crisis

As many as half a dozen investigative and regulatory agencies in India are probing the roles played by these two auditors in the scam.

The white collar crime watchdog Serious Fraud Investigation Office has filed a case against the two auditors in a court in Mumbai. The National Financial Regulatory Authority is carrying out a quality review of the firms.

The Institute of Chartered Accountants has initiated disciplinary proceedings against the two audit firms. Stock market watchdog Securities and Exchange Board of India is carrying out a probe into the auditors’ role in IL&FS group’s listed entities.

A request for information is also being sought by the Enforcement Directorate, which is probing a case of money laundering at IL&FS group.

In most of these cases the allegations pertain to concealing of information and failure to report and flag instances of fraudulent accounting practices.