IL&FS Scam: ED Searches 6 Places in Delhi, Mumbai & Gurugram
The Enforcement Directorate (ED) is carrying out searches at six places in Delhi, Mumbai & Gurugram in connection with a case registered in the Infrastructure Leasing and Financial Services Ltd (IL&FS) matter.
 
The ED has registered a case against former top officials of IL&FS, including its former chairman Ravi Parthasarathy, under the Prevention of Money Laundering Act (PMLA).
 
According to a report from Economic Times, the ED case follows the predicate offence registered with Delhi Police.  The Delhi Economic Offence Wing (EOW) is also probing the cash-strapped IL&FS and had registered a case under various sections of the Indian Penal Code (IPC) for criminal conspiracy and forgery.

The EOW’s case was based on a complaint by Ashish Begwani, director of New Delhi-based Enso Infrastructures.

It was alleged that in or about August 2010, Mr Begwani was approached by officials like Mr Parthasarthy, Hari Shankaran, and K Ramchand — all directors of IL&FS Transportation Networks Ltd.

“Allured by the tall promises, Enso Infrastructures agreed to invest in the company IL&FS Rail Ltd and invested Rs170 crore in order to take 15% shares of IL&FS Rail, a special purpose vehicle (SPV) for the Gurgaon Metro project. However, over a period of time, complainant observed that the company is not performing profitably and funds are being misused,” the complaint said.
 
According to reports, the searches are being carried out at the residential premises of the company directors, including Ramesh Bawa and Mr Parthasarathy.
 
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IL&FS Scam: NCLAT Lifts Moratorium, Orders Foreign, 'Green' Subsidiaries to Service Debt Obligations
The National Company Law Appellate Tribunal (NCLAT), while lifting the moratorium, has asked Infrastructure Leasing and Financial Services (IL&FS) and its group companies to service their debt obligations. 
 
Earlier, the NCLAT had imposed a 90-day moratorium on loan recovery from all 133 off-shore entities and some 22 domestic companies of IL&FS group.
 
The group with a consolidated long-term debt of around Rs91,000 crore has 133 entities which have been incorporated or located outside the country's jurisdiction including IL&FS Africa Infrastructure Development Company, IL&FS Global Finance Services (UK) Ltd and IIML Fund Managers (Singapore) PTE Ltd.
 
Accordingly, some of these companies would either have to service their obligation as per the agreed terms with lenders. However, many of these entities are said to be deep in the red and these could face liquidation.
 
In addition to the foreign entities, 22 firms out of the 169 subsidiaries, which have been incorporated in India, have also been taken out of the moratorium.
 
At present, only 22 companies from the IL&FS group have been categorised under the green category. The companies under this category include IL&FS Investment Managers, IL&FS Securities Services and IL&FS Paradip Refinery Water, among others.
 
Subsequently, a classification of entities into 'green', 'amber' and 'red' has been done by the resolution consultant appointed by the new board based on the 12-month cash flow based solvency test.
 
Until now, out of 169 companies of the group that have been incorporated in India, only 69 have been classified into the three categories.
 
As per the classification norms, 'Green' entities are those companies, which can service their debt obligations, while firm in 'Amber' group can partly meet their obligations and 'Red' are those which cannot make any payment obligations
 
Further, NCLAT has appointed former Supreme Court Judge Justice DK Jain to supervise the 'resolution process' of the IL&FS Group and its subsidiaries.
 
Last year, the Central government superseded the management of the beleaguered company via a NCLT order and appointed a six-member board led by Uday Kotak, managing director and chief executive (MD&CEO) of Kotak Mahindra Bank, to restore its financial solvency.
 
Key public sector lenders and undertakings such as Life Insurance Corp of India (LIC) and State Bank of India (SBI) have a shareholding of 25.34% and 6.42%, respectively, in IL&FS. The credit crunch has led a few of the company's subsidiaries to default in servicing some of the inter-corporate deposits.
 
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COMMENTS

G. C Mathur

2 months ago

email: [email protected]

ICRA downgrades IL&FS sharply
Rating company has downgraded the debt-laden Infrastructure Leasing and Financial Services (IL&FS) by several notches citing cash crunch pressure. The rating company has downgraded the company’s bonds and long term loans to BB from AA+. "The downgrade of ratings takes into account the increase in liquidity pressure at the group level,” it said in a note on Saturday. 
 
“While the company is in the process to raise Rs8,000 crore of funds from the promoter group (through a mix of rights issue and long term line of credit), timely receipt of the same is important to improve the group’s overall liquidity profile.” 
 
The rating company has sought further clarity on the timing of these inflows and given the sizeable repayment obligations of the group’s debt, this remains a key rating sensitivity in the near term. 
 
IL&FS management met to chalk out plans for immediate fund raising, a key lifeline that will help the company running. It has decided to seek short-term bridge loans of Rs3,000 crore from LIC and the State Bank of India, two existing stakeholders in the group. 
 
ICRA has also downgraded the commercial papers, issued by the IL&FS to A4 from A1+, a significant fall in the grade. CPs are short-term debt instruments. Some small-size mutual fund houses are holding such papers.  IL&FS has also sought to roll over its corporate deposits as it has failed to repay more than three-fourths of one-year term deposits of Rs250 crore.
 
Small Industries and Development Bank of India (SIDBI) has received only Rs50 crore while the remaining Rs200 crore is not yet credited, said a person, who did not wish to be identified. The ratings also consider the company’s elevated debt levels owing to the funding commitments towards group ventures coupled with slow progress on asset monetisation. 
 
The ratings continue to be under watch with developing implications taking into cognizance the Group’s ongoing strategic initiatives for deleveraging its balance sheet and stream lining the portfolio, ICRA said. 
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COMMENTS

SURAJIT SOM

4 months ago

It would be interesting to know how much these (mis) rating agencies were paid by IL & FS and its subsidiaries.

G SANTANU KUMAR DORA

4 months ago

What's the point now...every Tom dick and harry already downgraded it....long before.....Rating agencies should have taken the same step when the news started floating....but didn't as there was no fee to be made there..

V.Krishnamoorthy

4 months ago

Is it in order to affix a rating for an institution, when there is a moratorium?

Sreepathid

4 months ago

It's a shame on part of ICRA and CARE. They were cluless . I doubt their own ratings.

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