I am writing to thank you for the article entitled `IL&FS scam – Collusion at the highest levels’ carried in the June 15-30, 2020 issue of the online version of MEL.
The working class must constantly educate itself on the activities of the bourgeoisie so that it knows exactly how the system works. The case of the IL&FS scam demonstrates several important features, namely that the biggest auditing firms in the world, far from being the ones who keep accurate balance sheets and maintain books for companies, actually help in fudge them, and that the Government when it brings charges against companies and auditors deliberately makes mistakes in framing the charges, and the courts dismiss cases based on these mistakes. Thus, the precious value generated by the labour of the working class is frittered away by the bourgeoisie and the activities of the latter, even if called by any other name is nothing short of theft.
The case at hand is that of the Infrastructure Leasing & Financial Services and its collapse. The article here demonstrates the following:
* that there was a ban by the Government on the auditors of the company namely Deloitte Hasking & Sells and BSR (Affiliate of the KPMG group), was dismissed by the Bombay High Court,
* that Deloitte and KPMG are amongst the 4 biggest global audit companies,
* that the directors of IL&FS carried out several illegal acts and gave themselves huge salaries and bonuses despite knowing that their loans were risky, and diverted funds willingly,
* that the largest shareholders were public banks and LIC, and on the rolls of the company were many former bureaucrats giving IL&FS the opportunity to land projects, which caused a huge problem when it defaulted on its loan repayments, and that the scam is valued at 90,000 crores of rupees,
* that RBI did not take corrective action knowing that activities of the company were suspect,
* that the Ministry of Corporate Affairs directed the government’s Serious Fraud Investigative Office
* the report of 750 pages and 30,000 pages of annexures had loop holes which was used by the Bombay High Court to dismiss charges against the auditors,
* that there were other parallel cases as in the case of Price-Waterhouse.
The article points out that this is the nature of the capitalist system in India which steals money from the working class and gives it to the bourgeoisie. The working class must be educated thoroughly in this aspect so that there are no illusions about the system. I thank you for carrying this informative article.