A forensic audit of credit ratings obtained by crisis-hit Infrastructure Leasing and Financial Services (IL&FS) group entities under the erstwhile management has flagged widespread irregularities, including inducements to get favourable ratings despite adverse financial situation.
Citing an interim report of the special audit conducted by Grant Thornton on a mandate from the Government-appointed new board, sources said the former top management personnel at IL&FS and its group firms extended favours and gifts to the top executives of rating agencies and their families and also suggested changes in the rating reports before they were made public.
While the continuing probe has already led to CEOs of two rating agencies having been sent on leave by their respective boards, fresh details have emerged about suspected attempts by the former top management personnel of IL&FS Group to influence the rating agencies and their top officers for high credit ratings and also to thwart any negative ratings. The new board of IL&FS, which was appointed in October last year after massive defaults by the group post its debt burden ballooning to over Rs 90,000 crore and suspected wrong-doings by the former top management, had mandated Grant Thornton to carry out a a special audit for all high-value transactions undertaken by IL&FS Ltd and some of its group companies for the period between April 2013 and September 2018.
