The Industrial Development Bank of India (IDBI) has appointed consultancy and audit firm Ernst & Young as the concurrent auditor for the steel firms, Usha Ispat Ltd and Ispat Industries.
The move is part of the conditions imposed by IDBI for providing additional funds assistance to the companies earlier in the current fiscal.
IDBI had sanctioned a total of Rs 1,080 crore to six steel projects including Ispat Industries and Usha Ispat Ltd.
Sources said the concurrent auditors would monitor the cash flow position of the companies on a monthly basis and report the developments to IDBI.
IDBI sanctioned Rs 328 crore to Ispat Industries, Rs 316 crore to Usha Ispat Ltd, Rs 89 crore to Ispat Metallics India Ltd, Rs 151 crore to Jindal Vijayanagar Steel Ltd, Rs 104 crore to SJK Steel Corporation Ltd and Rs 92 crore to Essar Steels Ltd.
IDBI disbursed the funds to the six projects following a massive cost overrun of about Rs 5, 000 crore incurred by them.
As part of the conditions, the promoters have also been asked to bear 20 per cent of the increase in project cost.
The other major conditions laid down by IDBI include strengthening the management of these companies by appointing more financial institution nominees and outside experts on their boards, pledging of promoters' share-holding with voting rights, options to convert up to 100 per cent of additional loans into equity at par, maintenance of Trust a
