G LOBAL AUDITORS have had a torrid time of late. KPMG is haemorrhaging clients in South Africa after allegations of fraud linked to its work for the powerful Gupta family; Deloitte is under investigation in both America and Malaysia relating to scandal at 1MDB , a Malaysian state-development fund. In Britain the Big Four face threats of break-up after the failure last year of Carillion, a big government contractor for which all four had done work. Now Indian prosecutors have the auditors in their sights.

The most serious case concerns the collapse last year of IL&FS , a monstrously complex financial firm with deep state ties. On July 15th the corporate-affairs ministry will argue before a commercial court to have Deloitte’s and KPMG ’s local affiliates suspended from doing audits for five years because of flaws in their work for an IL&FS subsidiary. Ernst & Young ( EY ) is under fire, too: its local affiliate audited IL&FS and another subsidiary. It had already been suspended for a year from doing bank audits because of its work for Yes Bank, India’s fourth-biggest private lender. P w C , meanwhile, faces a two-year suspension relating to work for Satyam, a computer-services firm that went bust a decade ago.

These legal travails could bring to an end an odd exception to India’s localism. In most areas, lobby groups and nationalism have relegated global legal and financial players to bit parts. Global banks, with few exceptions, serve only cross-border transactions and business; global law firms run Indian practices—from anywhere but India. By contrast the Big Four’s local offices—which, like those elsewhere, are owned and largely managed by local partners—handle most multinationals’ Indian subsidiaries and 58% of the companies in India’s benchmark BSE 500 index, or 65% excluding public-sector banks.

Losing international auditors would be a heavy blow for Indian businesses. The country has thousands of auditing firms, but only a handful with more than two dozen partners. Indian executives regard having one of the Big Four on the job as a big comfort when they act as independent directors. Foreign investors and multinationals say they are essential if India is to attract foreign direct investment. Such arguments were no doubt advanced by Punit Renjen, Deloitte’s Indian-born, American-resident chief executive, who recently braved the brutal summer heat to visit family—and took the opportunity to do the rounds of government offices in Delhi.

IL&FS defaulted in the summer of 2018, leaving $14bn in debt. At first late payments by local governments for infrastructure projects were blamed for a cash squeeze. But since then official investigators have alleged gross misconduct. There have been four arrests to date, with charges yet to be made public.

Why are global auditors carrying the can when others were surely more culpable? IL&FS ’s complicated structure made a comprehensive view of its position all but impossible. One of its two main subsidiaries had more than 300 subsidiaries itself. These typically had other investors, often municipalities. State entities served as owners, managers, debtors and creditors. More than 50 firms audited various parts, under local laws that often barred independent oversight.