The investigation into the fall of Infrastructure Leasing & Financial Services is set to stretch to include the role of shareholders such as HDFC, State Bank of India and Orix Corporation.
An investigation will also be conducted into the role of CARE, India Ratings and ICRA, which had given high ratings to IL&FS before the crisis.
The Ministry of Corporate Affairs (MCA) is preparing the ground to probe how these shareholders and their representatives on the IL&FS board failed to flag the irregularities and deteriorating financial condition.
The progress comes after the new IL&FS board, which took control following the dismissal of the previous board in October last year, questioned the role of shareholders in the months leading up to the crisis.
The new board wanted to know why no alarm was raised notwithstanding clear deterioration in performance. A big crisis could have been stopped if shareholders had raised their voice. But they chose to remain silent.
This will be the first time IL&FS shareholders will be probed for any possible lapses.
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