Fifth IL&FS Progress Report Lists Asset-sale Plans and Also Complains About Coercive Acts by Banks, Defying NCLT orders
The government appointed board of Infrastructure Leasing & Financial Services (IL&FS) released its fourth and fifth progress reports outlining action taken with regard to sale of assets, recovery of money, liquidation of assets and other issue. 
 
It says that the assets for which sale process has been launched so far (except certain non- core assets) account for approximately Rs50,000 crores of the total outstanding fund based debt exposure of Rs94,000 crores. It has also listed developments in IL&FS’s overseas operations where several of its employees had been kidnapped and harassed. 
 
The progress report is, however, largely a list of actions taken and issues faced, which do not explain the reason for the slow progress that had led to a rap from the NCLAT (National Company Law Appellate Tribunal) last week. 
 
According to the report, State Bank of India (SBI), Allahabad Bank and Punjab National Bank have been refusing to release money in escrow accounts, while also adjusting and appropriating receivables, with the result that vendors and supplier payments as well as salaries and operational payments are delayed. This, it says, could affect the viability of some of the road projects.  
 
According the report, these actions are in defiance of an interim order of the NCLAT’s (National Company Law Appellate Tribunal) restricting banks and institutions “from setting off or exercising lien over any amounts lying with any creditor in any account of any entity in the IL&FS Group”. The table below lists the banks, companies and amount withheld.
 
 
In the absence of funds, there will be a deterioration in the quality road maintenance which could increase liabilities due to accidents and could lead to termination of the maintenance contracts by the road authority, it says.
 
According to the report, a consortium of banks (comprising of Punjab National Bank, Canara Bank, Indian Bank, Bank of India, Bank of Baroda, State Bank of Mauritius, Punjab & Sind Bank, Union Bank and Oriental Bank of Commerce) have been adjusting receivables of IL&FS Tamil Nadu Power Company Limited and refusing to release payments to suppliers and vendors (under the working capital limits). This could affect the company’s ability to remain a going concern. 
 
In addition, IL&FS is also facing hassles in receiving tax refunds for the years 2007-08 to 2015-16 adding up to Rs53.6 crore. 
 
Meanwhile, IL&FS, as a group, has statutory liabilities of a massive Rs434.63 crore pending as of November 2018 and has no funds to pay the dues. The effort to sell off road assets for which advertisements have been issued, have attracted 30 expressions of interest (EOIs). They include: 
 
(a)  Seven operating annuity based road projects in the different locations across India aggregating approximately 1,774 lane kilometres; 

 
(b)  Eight operating toll based road projects in different locations across India aggregating approximately 6,572 lane kilometres; 

 
(c)  Four under construction road projects in different locations across India which would aggregate approximately 1,736 lane kilometres upon completion; and 

 
(d)  Three  other assets and businesses, which are engineering, procurement and construction (EPC) and operations and maintenance (O&M) businesses of IL&FS Transportation Networks Limited and a Sports Complex in Thiruvananthapuram. 

 
The board has sought buyers for IL&FS Education & Technology Services Limited (IETS), Skill Training Assessment Management Partners in the education and vocational training fields as well as IL&FS Cluster Development Initiative Limited, which provides advisory and project management services to Central and State governments and industries. It has issued advertisements for the sale of the Alternative Investment Fund as well as luxury cars and immovable properties and assets. 
 
International Projects: 
 
ITNL International Pte. Ltd. (Singapore), or IIPL, is a 100% subsidiary of IL&FS Transportation Networks Ltd. (ITNL), is the holding company of all international investments of ITNL. It has subsidiaries in UAE, USA and China. These include ITNL Infrastructure Developers Ltd. (IIDL), which has a 51% shareholding in Parkline LLC and is developing the Dubai Supreme Court Complex with Robotic Car Park. This project has apparently received 11 EOIs. The 49% stake of IIPL in Chongqing Yuhe Expressway Co. Ltd. (CYEL), China which is a maintaining a 232 lane-kilometres road project. 

 
IIPL USA LLC, which has some road maintenance projects in Texas. 
 
Elsamex SA was handling three output-based performance and rehabilitation projects in Ethiopia through joint venture with ITNL for the Ethiopian Roads Authority. Its failure to pay wages and other liabilities had led to the arrest of employees in that country, which made headlines in India. Of the three employees arrested, two were acquitted and one is on bail.
 
IL&FS and the Exim Bank in Ethiopia arrived at a settlement with the local labour to have funds released for settlement of dues for wages. Over the next few months it hopes to be able to release funds for 200 workers and secure the return of four Indian employees who remain stranded there. 
 
The board believes that assets with a book value of US$13.54 million lying at various project sides will cover the outstanding dues and liabilities of the three Ethopian joint ventures. This also has been progressing slowly. Sources say there may be some institutional guarantees from Indian institutions for these projects. 
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    DS Kulkarni's Brother Makrand Detained at Mumbai Airport While leaving for US
    Makarand S. Kulkarni, the brother of Pune-based realtor Deepak S. Kulkarni, both of them accused in a Rs 2,000-crore investors scam, was detained at the airport here on Tuesday and not allowed to leave the country.
     
    Makarand is one of the directors in the D.S. Kulkarni Developers along with other family members, and was stopped from travelling to the US.
     
    This is the second time within four days that a prominent personality has been restricted from travelling aboard. On August 9, veteran journalist Prannoy Roy and his wife Radhika were similarly stopped and detained at the airport.
     
    Tuesday's action was initiated following the Pune Police Economic Offences Wing (EOW)'s 'look-out circular' issued in Makarand's name recently.
     
    He has been allegedly absconding after his anticipatory bail plea was rejected by a Pune court and was likely to be taken to his hometown and placed under arrest, official sources said.
     
    Following complaints lodged by an investor in 2017, the Pune Police filed an FIR against Deepak S. Kulkarni, his wife Hemanti, besides 13 others including family members and outsiders.
     
    While 10 accused have been arrested so far, a few others, including Makarand, were evading arrest, and Deepak S. Kulkarni and Hemanti are currently in custody.
     
    However, earlier this year, the prime accused Deepak S. Kulkarni had denied all charges levelled against him and his family members.
     
    It may be recalled that in Feb. 2019, the Enforcement Directorate (ED) had attached the DSK Group's assets worth Rs 904 crore and also booked its top officials under the Prevention of Money Laundering Act (PMLA) 2002.
     
    "Investigation disclosed the trio and others conspired themselves and formed eight partnership firms - DS Kulkarni and Company; DS Kulkarni and Associates; DS Kulkarni and Brothers; DS Kulkarni and Sons; DSK and Sons; DSK and Association; DSK Construction; DSK Enterprises - under the veil of DSKDL with the sole motive of collecting funds from people in Mumbai, Pune, Kolhapur, and other cities," the ED had said then.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    Competition Commission fines Jaiprakash Associates for abuse of dominant position
    The Competition Commission of India (CCI) has found Jaiprakash Associates Ltd (JAL) to be in contravention of the provisions of Section 4 of the Competition Act, 2002, for abuse of dominant position in the market.
     
    The abuse has been identified with independent residential units such as villas and estate homes in their integrated township, by imposing unfair and discriminatory conditions on the allottees in the Wish Town and Jaypee Greens project in Noida and Greater Noida, respectively. Subsequently, a fine of Rs 13.82 crore has been imposed on the company.
     
    The CCI final order was passed on an information filed by a buyer who alleged that conditions imposed by JAL were arbitrary and heavily tilted in favour of it.
     
    Based on the investigation, the Commission found that the standard terms and conditions imposed by JAL were one-sided and couched in a manner so as to unilaterally favour itself and be unfavourable to the consumers.
     
    Moreover, terms were vague and did not confer any substantive rights on the buyers. The conduct of JAL, such as collecting money and charges from the buyers without delivering the residential or dwelling unit on time, adding additional construction and amending or altering layout plans, imposition of various charges, right to raise finance from any bank or financial institution/body corporate without consulting buyers, was held to be abusive.
     
    The Commission has concluded such conduct of JAL to be in violation of Section 4(2)(a)(i) of the Act. Resultantly, the Commission imposed a penalty of Rs 13.82 crore on the company. Besides, a cease and desist order has also been issued to JAL.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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