IL&FS Mess: SFIO Investigation Throwing Up New Dirt on IL&FS Dealings
The Serious Frauds Investigation Office (SFIO) is meticulously trying to unravel the dubious loans granted and round-tripped by Infrastructure Leasing and Financial Services Ltd (IL&FS) by seeking information from all borrowers on their links with the 346 entities in the failed infrastructure and finance conglomerate. 
 
This exercise itself is throwing up several interesting revelations, including the role of scores of Indian Administrative Services (IAS) officers and their relatives who seem to be embedded in the group, including directors and chief executives (CEOs) of several subsidiaries of IL&FS. 
 
The failure to supervise IL&FS is, probably for the first time, not so much a political scam as that which was sanctioned and buried by the bureaucracy. That is probably why the investigation into what happened at IL&FS is proceeding at a very slow pace. 
 
Sources inside IL&FS point out that CS Rajan, who has been appointed the managing director (MD) on 3 April 2019, was extremely close to the IL&FS top management and helped cement their equation with the Rajasthan government when he was chief secretary there. 
 
Hence, despite the arrest of Hari Sankaran, former vice-chairman and MD of IL&FS, there is a general sense that the government is not serious about investigating why this sprawling institution with the massive outstanding debt of almost Rs99,000 crore is not being investigated and resolved with the same seriousness as relatively smaller defaulters such as Vijay Mallya and Nirav Modi. 
 
IL&FS is being investigated by three entities—the SFIO, the enforcement directorate (ED) and the forensic audit team of Grant Thornton, working on Project Icarus. Project Icarus first exposed the nature of round-tripping and suspicious deal by IL&FS Financial Services Ltd (IFIN) with other entities within the group, joint venture partners, borrowers and others and the suspicious nature of many loans. 
 
The SFIO seems to be taking this forward by sending out a list of questions to all borrowers of IFIN seeking following information. 
 
a) List of loans taken by you in all your entities. 
 
b) Reason for taking the loan.
 
c) Whether you approached IFIN for a loan or whether an official from IFIN approached you to offer a loan.
 
d) Whether your books/accounts were utilised for lending to you and then asking you to lend the money further to any other entities in the IL&FS group. If so provide details. 
 
e) Copy of bank statement evidencing loan disbursal and its utilisation (with copies of utilisation certificate).
 
f) Whether you had any relationship, including financial relationship with any individual in IL&FS group entities. If so provide details.
 
g) Whether you had sold/disposed off any assets including real estate property, through any of your group entities or even third parties to any officials of the IL&FS entities.
 
h) Ledger accounts of all the loans taken/given by you from/to IFIN or any other IL&FS entities.
 
i) Any other issues / document relevant to the said transactions.
 
At least in one case reviewed by us, these questions have led to the disclosure of how the company has been defrauded by IL&FS. We are withholding its name to prevent a backlash against it.  
 
The company has informed the SFIO about how IL&FS and entities related to it had allegedly defrauded the group and caused financial damage by delaying loan disbursements. 
 
The borrower goes on the name a retired IAS officer who heads the lending entity, and remains a director on several joint ventures with the Tamil Nadu government. 
 
Meanwhile, lakhs of investors are worried about the fate of their life savings invested through private pension funds and mutual funds.  All these investment institutions were fooled by the AAA credit rating enjoyed by the group until the very day that Moneylife reported the first default to SIDBI
 
We have also discovered that the government had issued sovereign guarantees to this company run by a small self-serving cabal and has been quietly paying up on its behalf without a word of disclosure in the public domain. 
 
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    COMMENTS

    Ramesh Poapt

    5 months ago

    ML/SD were perhaps first to report much earlier.

    parinita seth

    5 months ago

    I had been in the audit team of the IL& FS group companies , during my CA training period and after , as u can guess I fought with my team and the management for proper scrutiny of evidence , my senior partner told me just do a random work and don't mess they are powerful people and wouldn't let u pass CA exams .
    But I thought I am a good student I would crack the CA final easily, so it just 10 years now every time I fail in finals with 3 -4 marks and now I know why they were doing this to me.
    If at that time proper scrutiny had been done this would have come out 10 years ago.

    REPLY

    terence lewis

    In Reply to parinita seth 5 months ago

    Bluffing

    Veeresh Malik

    In Reply to parinita seth 5 months ago

    Why not write a more definitive essay on this subject? And do your Law studies in paralel is what I would suggest.

    tanay

    5 months ago

    Why has Ravi Parthasarathy still not been arrested!

    SANJEEV

    5 months ago

    Please remember there are hundreds of individual investors in ILFS and IFIN preference shares and bonds. They don't have resources to fight this giant company backed by bureaucrats. Staring at loss of life savings made seeing LIC, SBI, HDFC as promoters and Triple AAA ratings. No one is helping us. Or even responding.

    SURAJIT SOM

    5 months ago

    This was -in all probability-a criminal organisation by the bureaucrats, of the bureaucrats and for the bureaucrats-ex or otherwise. Naturally many of them are IAS-retd or otherwise. It is not surprising that many of them were ( and are )part of our state-led "socialist "economy. They are, in many ways, comparable to commissars in formerly communist countries- in Russia -for example. This investigation will not go far. It is indeed amazing that is has come so far. Under UPA, it would not have been exposed.

    REPLY

    k vijaya bhaskar

    In Reply to SURAJIT SOM 5 months ago

    Look at how Adani group got 5 airports under PPP without Cabinet approval!

    k vijaya bhaskar

    In Reply to SURAJIT SOM 5 months ago

    default on repayment to SIDBI started the chain reaction. It would have happened anyway, under UPA or NDA. Corrupt bureaucracy is not specific to socialist economies -- it is very much there in highly industrialised, capitalist economies.

    S Balakrishnan

    In Reply to SURAJIT SOM 5 months ago

    There was no need to expose.
    It collapsed by itself

    SURAJIT SOM

    In Reply to S Balakrishnan 5 months ago

    Did it ? The old cabal led by Hon'ble Mr Ravi appointed Hari Sankaran as the new boss !!!! This HS even presided over an AGM !!! Thereafter Govt took over. This honourable person is now in jail. This means citizens-like me or you -are paying for his food, lodge,medical etc !!!

    IL&FS Scam: SFIO Arrests Ex-chairman Hari Sankaran
    The Serious Fraud Investigation Office (SFIO) has arrested Hari Sankaran, former chairman of Infrastructure Leasing & Financial Services (IL&FS), in connection with the ongoing investigations into the affairs of IL&FS and its group entities. This is the first arrest in the fraud-hit IL&FS scam. 
     
    Hari Sankaran has been arrested on the grounds of abusing his powers in IL&FS Financial Services Ltd (IFIN), through his fraudulent conduct and in granting loans to entities which were not creditworthy or have been declared non-performing assets and caused wrongful loss to the company and its creditors.
     
    It may be worth noting that IL&FS Financial Services had borrowings of more than Rs17,000 crore from debt instruments and bank loans. Provident funds, pension funds, gratuity funds, mutual funds, public and private sector banks, are among those who have invested in these debt instruments.
     
    After the arrest, he has been granted SFIO custody till 4 April 2019.
     
    Earlier in December 2018, the ministry of corporate affairs (MCA), in its submission before the National Company Law Tribunal (NCLT), had revealed details of its finding on several instances of misreporting of income, dubious transactions, conflict of interest, ever-greening of loans and rampant personal enrichment of key employees, including Ravi Parthasarathy, Hari Sankaran, and Arun Kumar Saha, besides others. 
     
    In the interim report, the SFIO had stated,"...it is evident that IL&FS procured funds from the market through short-term instruments and invested in its group companies by way of giving long-term loans and advances, which was prejudicial to the interest of IL&FS, in terms of financial solvency. During these distressed times, IL&FS and its key subsidiaries such as IFIN and IL&FS Transportation Network Ltd (ITNL) were contained to raise short-term market funding through commercial papers or inter corporate deposits based on its bogus and fictitious but good credit rating and these short-term loans were passed to its project special purpose vehicles (SPVs) or group companies, for helping them service their debt obligations, management fully aware, thereby hid and avoided possible defaults resulting into increasing indebtedness on a standalone basis."
     
    "This is virtually an act of fraud causing indebtness of IL&FS to over Rs91,000 crore. This indebtness is deliberate, wilful, fraudulent act of directors who were the mind controlling the affairs of IL&FS with intention to defraud creditors, who too had failed in their due diligence. An increasing level of indebtness of IL&FS, year after year, was sufficient red flat for the creditors to prevent further loans and advances. Such discriminator acts of lenders have provided long rope to the directors in control of affairs to put IL&FS in coma," the report added.
     
    Last year, the government superseded the management of the beleaguered company, which has around Rs91,000 crore in long-term debt, through a National Company Law Tribunal (NCLT) order and appointed a six-member board led by Uday Kotak, MD and CEO of Kotak Mahindra Bank, to restore its financial solvency.
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    COMMENTS

    Veeresh Malik

    5 months ago

    Does this help I getting the looted money back? In some cases that I know about, the eventual beneficiaries are sitting pretty, protected by their clubs and silos on Delhi built around their elected and more so selected representative categories.

    GLN Prasad

    5 months ago

    It is high time institutions learn a lesson, it is like Police coming just before closing of the movie show or dogs barking several years after the theft. On one hand, some innocent officials are fixed in some scandal and those scamsters that plan the conspiracy escape unhurt.

    P S Krishnan

    5 months ago

    When are they going to arrest and jail the chief crook Ravi Parthasarathy who is hiding in London and his sidekicks that were all involved in the loot?

    REPLY

    AAR

    In Reply to P S Krishnan 5 months ago

    Whats so special about London?

    Mohan Krishnan

    In Reply to AAR 5 months ago

    London is the World's refuge Capital for White Collar Criminals. London has many overseas Billionaires from Russia, India, China, Pakistan etc. Legal system is so convoluted and well designed to protect the loot and the looters.

    Mohan Krishnan

    5 months ago

    "Creditors also failed to do due diligence". Meaning : Managers of MFs, Provident Funds, Banks were drugged by bribe money .

    IL&FS Shocker: Govt Quietly Paying Up on Sovereign Guarantees to ADB and KfW for Failed Group’s $ 50.4 Million Loan
    In a shocking revelation of new information, it turns out that the government of India, in 2009, had issued a sovereign guarantee on behalf of Infrastructure Leasing & Financial Services (IL&FS), which is at the centre of what is fast turning out to be one the biggest financial scandals in India. IL&FS is a shadowy private company, which has been run by a cabal headed by founder, Ravi Parthasarathy, for almost 25 years. 
     
    These guarantees have been issued on behalf of Asian Development Bank (ADB) and KfW (Kreditanstalt für Wiederaufbau of Germany). Since IL&FS is unable to pay, the government has quietly ponied up the money after discussions with the finance ministry. It is interesting that the issue of these payments has not been brought before the NCLAT (National Company Law Appellate Tribunal) which is hearing the bankruptcy proceedings of the group.  
     
    Sovereign guarantees are only issued for government projects or, occasionally, for public sector companies. The ADB report suggests that guarantees have been issued to several infrastructure projects as well, especially in the power sector. In 1992, when Enron first proposed a sovereign guarantee for the Dabhol Power Company’s gold-plated project, it was hugely controversial. Clearly, no lessons have been learnt, since infrastructure projects of IL&FS and many others have turned out to be just as inflated.  
     
    The government guarantees, once again, expose how closely the Parthasarathy-led cabal worked with a network of compromised officers of the Indian Administrative Service (IAS), to run an organisation that had the best of both worlds—the power of a government organisation and the money of private sector—allowing IL&FS officials to draw high salaries and perks even as the ship sank.
     
    However, the government, which is now found to be making payments on behalf of this massive failed conglomerate, has been treating the ousted management of IL&FS with extremely soft gloves. 
     
    Sources in the know say that two payments have been made to the two multilateral institutions in the past couple of months. Reliable sources have confirmed at least one payment of $2 million in the past two months to ADB, for instalments that fell due, and about €600,000 to €700,000 have been paid to KfW. 
     
    A search on ADB’s website reveals that a $100-million loan was originally sanctioned to IL&FS around 2001 but half of it was cancelled sometime in 2007 due to “the lack of a subproject pipeline” as part of a revised loan agreement. Finally, a loan of $50.4 million was disbursed.
     
    The document further says, “Since 2002, the borrowings (of IL&FS) from bilateral and multilateral agencies have included the ADB loan under PSIF II and €30.55 million from KfW.”
     
    And that the “(Indian) Government guaranteed the loan, which was made from ADB’s London interbank offered rate-based lending facility with a maturity of 20 years, including a grace period of 5 years.” 
     
    Here are the details, in a nutshell, as reported on ADB’s website. 
     
     
    The loan was further distributed to three sub-projects: The Ahmedabad Mehsana Toll Road Project, the New Tirupur Area Development Corporation and Western Gujarat Expressway Project. It was divided into senior and subordinate debt, with tenures of 15 years and 20 years, respectively. This would mean that the last instalments were due when IL&FS got into serious financial trouble. 
     
     
    Of the three projects, New Tirupur is mired in litigation, has gone through restructuring and continues to make losses. The Ahmedabad Mehsana Toll Road Project also made losses in the initial years and also saw its debt restructured. However, IL&FS had been regular in servicing the debt, probably until it collapsed in July last year. 
     
    Based on information available on the ADB website, one assumes that a part of the loan would be nearing maturity. Moneylife has written to ADB and KfW seeking a response and this article will be updated to include these, when we receive them. We have also connected with IL&FS’s communication head to ask how much of the loans to ADB and KfW are still outstanding. This, too, will be updated when we hear from them. 
     
    Details of the sub-loan are available as follows:
     
     
    When the ADB financing was being considered, there was talk about KfW of Germany partnering in the project. However, it is not clear if it did, eventually, participate in this project. The ADB document of 2001 says, “KfW representatives joined the ADB Pre-appraisal and Appraisal Missions. KfW has, in-principle, agreed to co-finance the PSIF II up to EUR162 million (about $147 million) comprising concessional funds of EUR25.5 million (about $23 million).” This was subject to government approval; but subsequent documents do not mention any partnership or government guarantee. 
     
    In June 2018, just before the group’s financial problems snowballed, media reports show that IL&FS Transportation Networks Ltd (ITNL), raised €23.4 million (Rs186.11 crore) in debt financing from KfW IPEX-Bank. This was a 13-year loan for the Rapid Metro South Extension Project in Gurugram. 
     
    At that time, Luis-Miguel Gutierrez, chief representative of KfW IPEX-Bank in India had said, this was the “first ECA financing ever done to support an Indian metro project” and, in doing so, it had “introduced a completely new financing model in the Indian market.”
     
    The fact that the government extended a sovereign guarantee to IL&FS shows how deep was the nexus between IL&FS officials and finance ministry which, instead of monitoring its spending, was happy to guarantee its reckless expansion spree. 
     
    The projects follow the familiar IL&FS template where multiple group entities get a share of the project pie by undertaking various responsibilities such as preparing the project report, implementing it, undertaking environmental impact assessment and also monitoring it. 
     
    ADB says, in a published document, that it looks for “state guarantees” in order to “meet non-commercial risks and allow disaggregation of risks and proper risk allocation in the Indian environment.”
     
    The document points out that sovereign guarantees have been issued to large fast track infrastructure projects in India. It reveals that a commitment regarding government guarantees or sovereign guarantees were secured in 2001; a BJP-led government was in power then. 
     
    However, under the Fiscal Responsibility Bill introduced in that period, there is a commitment that the government “will also not extend guarantees to projects beyond 0.5% of GDP in any given financial year.” The government also earns a guarantee fee. As regards guarantees issued by state governments these are capped by the Reserve Bank of India (RBI).
     
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    COMMENTS

    Prakash Bhate

    5 months ago

    The resources and efforts spent by Pakistan sponsored terrorists in destabilizing India are but peanuts when compared to the unrelenting and systematic destabilization caused by in-house financial terrorists in the garb of netas, babus, auditors, bankers and industrialists. The former at least are open about their intentions and put their lives on the line for which they and their masters command a grudging acknowledgment. They are hunted down and destroyed as they should be. The latter have been plundering and will continue to plunder with impunity. They are looked up to, lionized and treated with deference. Hunting them down and destroying them is impossible. Ostracizing them, their family and friends is the only option.

    SuchindranathAiyerS

    5 months ago

    Corruption is now pervasive among "democracies" indicating the self indulgence of wide spread non accountability. Accountancy joins law as a disease rather than a profession: Corruption (and greed) is the most corrosive anti Human disease in the World. India shows the way in this.

    https://www.taxresearch.org.uk/Blog/2019/04/09/accountancy-in-crisis-fundamental-reform-is-needed/

    S KINGSLEY MARTIN

    5 months ago

    Why Ravi Parthasarathy is not being pursued / arrested? For being at the helm for so many years, he should have been the first one to be arrested.

    REPLY

    Ramesh Bajaj

    In Reply to S KINGSLEY MARTIN 5 months ago

    If he has left the country, then he should be put in the same category as Nirav Modi and others. They say the arm of the law is long
    .. what needs to be done should be done.

    Liju Philip

    5 months ago

    Please dont disturb. The chowkidar is busy with electioneering for the past 5 years. Let his cronies and funders keep plundering the economy.

    REPLY

    Aditya Singh

    In Reply to Liju Philip 5 months ago

    Hello covert devotee. First read the article, then get some financial education.

    "In a shocking revelation of new information, it turns out that the government of India, in 2009"

    Don't worry NSE Co-Location, ILFS and thousands of other scams from the Congress regime will face the light of the day. Shit stinks, can't be hidden long.

    And to you my dear friend, Devotee of a man born to a virgin woman, Your Pappu and Librand fauj won't get a second chance at scamfest.

    Zebulin

    In Reply to Aditya Singh 5 months ago

    Would you be offended if someone calls you a pen#s worshipper ? Bharat Mata ki Jai!!

    K V RAO

    In Reply to Aditya Singh 5 months ago

    In a democracy anybody can say anything. But language used should not hurt anyone, even your enemies.

    K V RAO

    In Reply to K V RAO 5 months ago

    Ref is to Liju and not to Singh

    Vivek Naik

    In Reply to K V RAO 5 months ago

    Are you sure?

    K V RAO

    In Reply to Vivek Naik 5 months ago

    Yes

    K V RAO

    In Reply to Aditya Singh 5 months ago

    Good articulation Singh Sir.

    Sunil shenava

    5 months ago

    lack of diligence on part of all the parties involved..

    Sridhar Reddy

    5 months ago

    Please get the crook Ravi Parthasarathy back into India and put him behind bars. He and his coterie ran the institution as their personal property with zero professionalism. Ravi is a bigger swine than Vijay Mallya as in this case, so many PF funds have put their money in IL&FS bonds exposing to risk the hard earned money of millions of employees. Also question the credit rating agencies - are they blind and ignorant, which they will say yes !!!

    Bharat Galgali

    5 months ago

    What is root cause of scandle its in principle approval, rest follows the formality.

    REPLY

    K V RAO

    In Reply to Bharat Galgali 5 months ago

    Rest is not a formality but a substance. In principle approval pertains to clearance from funds and discretionary angles.

    RAMACHANDRAN THARKABHUSHANAM

    5 months ago

    It is surprising that UPA's blunder is covered up by NDa. STRANGE BED FELLOWS

    REPLY

    Aditya Singh

    In Reply to RAMACHANDRAN THARKABHUSHANAM 5 months ago

    Sometimes a mess is discovered only once it's a mess. The NSE Co-location shitshow feat. Karti is another one of these. God alone knows what landmines from the UPA era haven't blown up yet. I remember in the 1st year of post UPA Govt. mentioned that UPA has laid several landmines in the economy. I'm sure if someone digs out Govt. bonds issued during UPA for deferring payments to oil companies and calculates the debt created thanks to the interests; they'd be shell shocked.

    Vivek Naik

    In Reply to Aditya Singh 5 months ago

    IlFS is also involved in Gujarat Gift city project.

    Both Bjp and Congress are have helped this corrupt company.

    Vivek Naik

    In Reply to Aditya Singh 5 months ago

    IlFS is also involved in Gujarat Gift city project.

    Both Bjp and Congress are have helped this corrupt company.

    Krishna Kumar B

    In Reply to RAMACHANDRAN THARKABHUSHANAM 5 months ago

    It is vice versa

    Krishnamurthy Nagarajan

    5 months ago

    SD probably feigns ignorance about the difference between in principle approval and sanction. Even if a loan is sanctioned, there has to be a review before the loan is released. This is the norm for the bankers (as the assumptions made at the time of sanction may not be valid at the time of release.) Many bankers are charged on this principle. Why not the Govt in power in 2009?.

    REPLY

    Sucheta Dalal

    In Reply to Krishnamurthy Nagarajan 5 months ago

    Feign ignorance? How do you jump to that conclusion. I am only clarifying to readers that we should not jump to make this a political issue -- all are complicit. So let's not pretend it it is a UPA scam. The principle here is that private sector projects had no business being given a sovereign guarantee without a proper public discussion. If we want to charge the govt of 1999 -- to suit your political inclinations -- why not that of 2001 which approved in principle??

    K V RAO

    In Reply to Sucheta Dalal 5 months ago

    You are again taking up in principle approval. Those who are familiar with bank loan operations vouch for " zero value" for in principle approval. As I had mentioned earlier "in principle approval" at best implies administrative clearance from funds and exposure angles.

    Ramesh Bajaj

    In Reply to Sucheta Dalal 5 months ago

    What is the way forward now? I think your judgement is correct...all are complicit.

    jaideep suri

    In Reply to Sucheta Dalal 5 months ago

    Yes SD is right all are involved in this especially the IAS which participated in creation of a myth that it is a government entity.

    Harish

    5 months ago

    Great Investigative Journalism!

    CHATHANTARA GOPALAN PRADEEP KUMAR

    5 months ago

    Sovereign guarantees once issued have to be honoured when they are invoked. Otherwise the credibility of Indian Govt and the credit rating of India would be impaired.

    The above fact should not in any manner sidetrack the investigations to bring all the rent-seekers in the ILFS scandal to book. Parthasarathy and his cabal knew well how to work the system. By rewarding many civil servants with board positions and perks he appears to have insulated himself from all harm and built ILFS to a position where it is probably too big to fail !!

    The largest share of the blame must however be firmly placed at the doors of credit rating agencies and auditors who have simply abdicated their responsibilities.

    Hopefully when the perpetrators of the massive scandals at ILFS are brought to book, the key credit rating personnel and auditors should also be subject to exemplary punishment.

    Moneylife must be complimented for its unremitting reportage on ILFS which appears to be sadly receding
    from the business press in India.

    A story is now overdue about the key personnel who credit rated and audited the ILFS (besides the ILFS Board members).

    Meenal Mamdani

    5 months ago

    Why is the current BJP govt not making this problem public? This looting was done by the previous govt Congress led UPA II. Why is Modi going soft on the Gandhis when this could be great news to assure election victory? Is it I will shield you if you will shield me? Do Indians have any honest bankers, administrators and politicians left?

    REPLY

    Suketu Shah

    In Reply to Meenal Mamdani 5 months ago

    well said but 99% of the battle between congress and bjp can be termed as a 'friendly match" just to fool the public.In vain though.

    Vivek Naik

    In Reply to Suketu Shah 5 months ago

    :-)

    jaideep suri

    In Reply to Meenal Mamdani 5 months ago

    some where the roots also touch the earlier BJP government and hence keeping quiet makes political sense.I reiterate once again IAS lobby is the one which created this so called company which is neither here nor there--Pvt/Govt.

    sundar

    In Reply to Meenal Mamdani 5 months ago

    Powerful beuracracy is involved in this. That's why even Modi is afraid of touching them. In coal scam, just two years imprisonment was given to former secretary. For that the IAS association has written a protest letter to government.

    AAR

    5 months ago

    There are several companies which the public do not know whether it is Private or Government entity. Maybe we can add letter "G" at the end of the name of all Government owned entities.

    K V RAO

    5 months ago

    Sovereign guarantee was issued in 2009 during UPA-II period. Does the writer means to say that the present Government should have dishonored the claim under the guarantee? Is it possible? Accountability should be traced to 2009 and not now. Why the writer has not commented on this issue and straight away jumped to irrational conclusion finding fault with the current dispensation? Please, please do not mislead us.

    REPLY

    Sucheta Dalal

    In Reply to K V RAO 5 months ago

    Please read carefully before jumping to defend this government. And ADB document says that the in-principle approval for a sovereign guarantee was given as far back as 2001. Only sanctioned in 2009. So please think about who was in power at that time. Maybe it explains the secrecy and silence!!

    I had actually put in a line that this was a legacy issue until I saw that ADB document. It is in the link. Some readers who have so many questions can take trouble to read.

    And, like S Balakrishnan says -- I am surprised that so many people seem to think a sovereign guarantee can be dishonoured.

    That it was given in the first place for a private company project has to be questioned!!

    If there are many such HIDDEN guarantees for projects of Ambani (anil and mukesh), Adani, Videocon and others, we would be in serious trouble -- even if they were routed through cover institutions such as ILFS, IDBI, EXIM Bank or any other.

    We the people dont seem to be waking up to ask questions even after so many provident funds and mutual funds, which involves the retirement savings of many readers are affected!!!!

    Manojkumar Das

    In Reply to Sucheta Dalal 5 months ago

    True

    K V RAO

    In Reply to Sucheta Dalal 5 months ago

    I am happy when you admit that 2001 Government gave in-principle approval but it was actually sanctioned in 2009. In principle approval is not the real sanction. In principle approval is referred to as administrative approval in banking circles. It just refers to jurisdiction issues and sanctioning powers. The sanction coming in second stage is done after detailed appraisal. So there have been holes in the appraisal memo. Further the appraisal note has only projections and assumptions. The sanctioning authority should arrange for ongoing verification of performance vis-a-vis projections and assumptions. One such good and quality assessment reveals shortfalls and the authority should initiate checks and balances. It should also be careful about its future commitments and exposures. All these aspects have gone unnoticed in ILFS case and accountability is totally missing. The writer Sucheta,known for sharp writings, has missed out these issues.

    Krishna Kumar B

    In Reply to K V RAO 5 months ago

    In principle approval is not just a piece of paper sovereign govt. issue to anyone it comes across. Such approval is arrived at afterassessment. Subsequent govt. have to adhere to it, if conditions in the approval are met.
    Why eager to exonerate those who issued 'in principle sanction'?

    Ramesh Bajaj

    5 months ago

    If a guarantee has been given, the government has no choice but to pay. But why handle the persons responsible with soft gloves?

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