IL&FS Scam: Asset Sale Should be Under Supervision of Retired SC Judge, says NCLAT
The National Company Law Appellate Tribunal (NCLAT) on Friday suggested that asset sale of Infrastructure Leasing and Financial Services (IL&FS) should be under supervision or oversight of a retired judge from the Supreme Court. 
 
While staying arbitration proceedings against the cash-strapped group, the Tribunal asked IL&FS to submit details of all the arbitral proceedings going on against it and its 348 subsidiaries. However, arbitration proceedings where IL&FS is getting money will continue, the two-member bench headed by NCLAT Chairperson Justice SJ Mukhopadhaya said.
 
IL&FS group, which had a debt of more than Rs91,000 crore at the end of March 2018, is trying to sell its companies and their assets as part of its asset monetisation efforts to pay off the dues. Next hearing on the matter will be held on 28th January.
 
Last year in October, the Central government superseded the management of IL&FS by appointing a six-member board led by banker Uday Kotak to restore its financial solvency after it defaulted on payment dues triggering liquidity concerns in the NBFC sector.
 
By November, the firm initiated the asset monetisation process and received over a dozen Expressions of Interest (EoIs) towards acquiring its stake in IL&FS Securities Services Ltd (ISSL) and ISSL Settlement and Transaction Services Ltd (ISTSL).
 
Later, it initiated the process to sell its renewable energy business, the group's interests in education (IL&FS Education & Technology Services Ltd) and the 'Alternative Investment Management' businesses, along with other subsidiary businesses.
 
On Wednesday, IL&FS said it received more than 30 EoIs for domestic roads vertical IL&FS Transportation Networks Ltd. It includes its domestic EPC (Engineering, Procurement and Construction) and O&M (operations and maintenance) businesses.
 
IL&FS Ltd is a core investment company and serves as the holding company of the IL&FS Group, with most business operations domiciled in separate companies, which form an ecosystem of expertise across infrastructure, finance and social and environmental services.
 
Separately, according to a report from Times of India, the Gujarat Metro Rail Corp (GMRC) had terminated a contract awarded to IL&FS Engineering & Construction due to delays in completing the project. The Rs374.64 crore contract was to build four stations and lay a 4.6kms viaduct for the metro project in Ahmedabad. However, facing financial constrains, the IL&FS group company had stopped work on this project since September 2018. GMRC has now given the contract to J Kumar Infrastructure. 
 
Meanwhile the debt-ridden group has urged Export-Import Bank of India (Exim Bank) to release funds to secure the release of four employees still held hostage in Ethiopia by local staff, says a report from the Hindu Business Line
 
In a letter to the Exim Bank, Dilip Bhatia, chief executive of IL&FS Transportation Networks Ltd (ITNL), said the company has sought 4.89 million Ethiopian birr (ETB) from the bank. The local employees of IL&FS’ joint venture in Ethiopia, ITNL-Elsamex JV Bure, have demanded an additional four months’ net salary for the release of the four Indian employees who have been held hostage since 24 November 2018. 
 
“This is a crisis our employees are facing in Ethiopia and it’s our humble request to kindly let these funds be unblocked to help our employees,” the ITNL letter dated 8 January 2019, seen by BusinessLine, states, adding that the bank should take a view on “humanitarian grounds”.
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IL&FS receives over 30 EOIs for domestic roads vertical
Debt-ridden IL&FS has received more than 30 expressions of interest (EOIs) for the domestic roads vertical housed under its subsidiary, IL&FS
Transportation Networks Ltd.
 
"More than 30 expressions of interest were received for acquiring IL&FS' interests in its domestic road vertical including its domestic EPC (Engineering, Procurement and Construction) and O&M (operations and maintenance) businesses. Initiated on December 18, 2018, the launch is towards developing a resolution plan(s) for the IL&FS group," the company said in a statement.
 
According to the company, the eligibility of the received EOIs is being scrutinsed.
 
"Interest has been received from a mix of strategic and financial players. Qualifying interested bidders will then be invited to review information on the business that would be shared with them, so as to enable them to submit commercial bids," the statement said.
 
"Any binding transaction for the sale of assets, as well as the resulting resolution plan(s), will be subject to requisite approvals (including the NCLT) before the transactions are concluded."
 
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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IL&FS Scam: NCLT Allows Govt to Re-open Past 5-years Financial Statements of IL&FS, ITNL and IFIN
The National Company Law Tribunal (NCLT) has allowed the government to re-open and re-cast the past five years' financial accounts of Infrastructure Leasing & Financial Services (IL&FS) and  its subsidiaries IL&FS Transportation Networks Ltd (ITNL) and IL&FS Financial Services Ltd (IFIN).
 
Last month, while submitting an interim report prepared by Institute of Chartered Accountants of India (ICAI), the Ministry of Corporate Affairs (CA) had sought the reopening of  financial records of IL&FS and IFIN and ITNL.
 
According to the MCA’s application, IL&FS and its group company auditors, Deloitte Haskins & Sells LLC, EY affiliate SRBC & Co. LLP and KPMG affiliate BSR & Associates LLP, understated bad loans and did not point out the inadequate provisioning made against such loans, violating norms set by Reserve Bank of India (RBI).
 
No reasons were given for increasing the liabilities or loans and the borrowing costs of the financial services subsidiary, leading to non-disclosure of the consequential impact of insufficient provisioning for debts, the report says.
 
ICAI, in its interim report had stated statutory auditors of IL&FS acted in a 'negligent and fraudulent manner' and prepared incorrect financial statements of the debt-laden group. Deloitte Haskins & Sells LLP, SRBC & Co. LLP, an affiliate of Ernst & Young (EY) and BSR & Associates LLP were auditors of IL&FS and its two main subsidiaries. According to reports, the newly constituted National Financial Reporting Authority (NFRA) may be assigned auditing of past five years’ books of accounts of IL&FS. 
 
During the last hearing, the NCLT had asked to send notices to Securities and Exchange Board of India (SEBI), RBI, Income Tax department and other statutory authorities before taking any decision on re-opening of IL&FS books. On Monday, a counsel for SEBI told the Bench that the market regulator did not have any problem in re-opening of the group’s listed companies’ financial statements, says a report from Moneycontrol.com.
 
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