3i Infotech’s record is defined by a decade-long regulatory deadlock over ₹1,066 crore in intra-group payables, a fraud of more than ₹128 crore by its former Managing Director, and an audit trail that collapsed to a disclaimer of opinion before partially recovering. The company carries zero promoter shareholding, operates through a multi-layered offshore structure where the central Mauritian entity has been disclaimed by auditors for years, and has seen its statutory auditor resign mid-term over a fee dispute.
Key findings
- A ₹1,066-crore intra-group payable and ₹444 crore in subsidiary receivables are stuck in regulatory limbo
Critical- The company owes ₹1,066.39 crores to its Middle East branch for intellectual property purchased in 2012, unchanged since FY2025. RBI approval to set off this liability against ₹444.48 crores in foreign subsidiary receivables has been pending since the October 2020 application, while the company simultaneously recognised a ₹335.69-crore credit-loss allowance against those same receivables. - Audit opinions collapsed to a disclaimer before partially recovering, and a fraud of more than ₹128 crore was reported
Critical- The standalone audit opinion fell from unqualified to a disclaimer in FY2024, then returned to unqualified in FY2026; the consolidated opinion went from unqualified to a disclaimer in FY2024-FY2025, recovering only to a qualified opinion in FY2026. The standalone auditor reported under CARO that a fraud of “more than ₹128 crore” was carried out by the former Managing Director and CEO, with a complaint filed with the Economic Offence Wing. - Auditor disclaimed FY2024 standalone opinion partly because a forensic audit was pending
Major- The statutory auditor disclaimed its opinion on the FY2024 standalone financials because the outcome of a forensic audit into legacy issues was still pending, and because audited statements of the Mauritian subsidiary were not provided. In the absence of sufficient evidence, the auditor was unable to comment on the management estimate for a ₹421.70-crore loss allowance and on the recoverability of the ₹812.77-crore carrying value. - Accounting choices systematically defer loss recognition and convert balance-sheet items into reported profit
Major- The company recognised a standalone exceptional provision of ₹421.7 crores for diminution in foreign subsidiary investments and ₹213.6 crores for long-outstanding receivables, both relating to the pre-March 2021 period. It presents legacy balances as a single net line item of ₹112.26 crores, exercising set-off rights over receivables of ₹108.79 crores, payables of ₹1,082.84 crores, and investments of ₹861.79 crores. - Goodwill and intangible impairments have been recurring and material, with the auditor disclaiming on a ₹21.93-crore loss allowance
Major- In FY2024, the auditor disclaimed its opinion because management capitalised ₹44.55 crores of intangible assets and then made a loss allowance of ₹21.93 crores, leaving a residual carrying value of ₹17.33 crores the auditor could not verify. The recoverable amount of consolidated cash-generating units based on value-in-use fell from ₹1,717.55 crores in December 2019 to ₹761.46 crores in December 2023. - Regulatory actions spanning FEMA, SEBI, MCA, and criminal complaints have accumulated over seven years without resolution
Major- The Enforcement Directorate ordered production of documents under FEMA against an entity amalgamated with the company in 2012; the company stated that data from 13-20 years ago was unavailable. The company filed a criminal complaint with the Economic Offences Wing on February 3, 2026 and a complaint with SEBI on February 12, 2026 regarding the eMudhra Consumer Services divestment. - Zero promoter shareholding coincides with persistent board and management churn and governance violations
Major- Promoter shareholding has been 0.00% from FY2022 through FY2026. The secretarial auditor found that a former Chairman’s third-term appointment violated the Companies Act, and that an unauthorised payment of ₹49 lakhs was made to the former MD & Global CEO for unavailed perquisites, later adjusted against his variable pay. - The statutory auditor resigned mid-term in October 2024 citing a fee dispute after audit fees were cut
Major- M/s. GMJ & Co. resigned on October 30, 2024, stating that the reduction in fees would not be commensurate with the effort required for the statutory audit of the company and its two material subsidiaries. Consolidated audit fees were cut from ₹75 lakhs in FY2023 to ₹50 lakhs in FY2024 and held flat for FY2025.
What to watch
- RBI set-off approval. The application to set off the ₹1,066.39-crore IPR payable against foreign subsidiary receivables has been pending since October 2020.
- eMudhra investigation. The Economic Offences Wing and SEBI are investigating the company’s complaint regarding the eMudhra Consumer Services divestment, filed in February 2026.
- Middle East subsidiary. 3i Infotech (Middle East) FZ LLC carries an adverse audit opinion, related-party dues of AED 416,244,395 with no audit evidence on recoverability, and a negative net worth of AED 63,234,252 as at 31 March 2026.
- Unaudited subsidiaries. 20 subsidiaries and 1 joint venture with total assets of ₹227.55 crores remained unaudited in the FY2026 consolidated financial statements.
- Saudi Arabia bankruptcy. Bankruptcy proceedings for 3i Infotech Saudi Arabia LLC were initiated in August 2025 and are in progress.
Bottom line: This is a record where the numbers on the balance sheet are shaped by a regulatory deadlock that has outlasted a decade, an audit that broke down entirely before being pieced back together, and a governance structure with no promoter stake and a board that has cycled through directors and key managers. The risk is not hidden in the footnotes, it is the footnotes. Watch the RBI set-off decision, the outcome of the eMudhra investigation, and whether the Middle East subsidiary’s going-concern uncertainty is resolved.