IIFL Finance (IIFL Finance) and JM Financial Products Ltd (JM Financial) will face a special audit over regulatory violations. The Reserve Bank of India (RBI) has started the process of appointing auditors. The Reserve Bank has issued two separate tenders for appointment of auditors for special audit of these two non-banking financial companies. Audit firms listed by Securities and Exchange Board of India (SEBI) can participate in the tender process for forensic audit.
Last date for bid submission is 8th April
According to the tender document, the last date for bid submission is April 8. According to the bid documents, the work will be awarded to the selected companies on April 12, 2024. Earlier this month, the central bank had imposed curbs on both these units for non-compliance with regulatory guidelines. The central bank had barred IIFL Finance from sanctioning or disbursing gold loans following some supervisory concerns over its gold loan portfolio. The Reserve Bank had said that the company was inspected with reference to the financial position of IIFL as on March 31, 2023. A day later, the Reserve Bank had imposed curbs on JM Financial Products Ltd.
case of involvement in manipulation
The investigation revealed that the company was involved in various types of manipulation. Which also included repeatedly helping a group of his own clients bid for various initial public offerings (IPOs) using borrowed funds. The central bank had barred non-deposit taking NBFCs from providing any kind of financing against shares and debentures.
IL&FS moves NCLAT
IL&FS group has moved NCLAT for selling stake in its companies with certain haircuts without shareholders’ approval. These insolvent companies have been placed under Category-2 of the resolution framework with non-sustainable debts. The final hearing on IL&FS’s interim application to sell stake in group companies falling under Category-2 was held earlier this week. During this, the government sought time from the National Company Law Appellate Tribunal (NCLAT) to file its reply. The maximum bid received for these companies is less than their debt. In such a situation, along with lenders, shareholders will also have to reduce their respective debt and equity.
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