The National Company Law Tribunal Monday asked nine former directors, including chairman and vice-chairman, of the crippled IL&FS group to disclose their assets and restrained them from selling or mortgaging their properties till the next date of hearing.
The National Company Law Tribunal Monday asked nine former directors, including chairman and vice-chairman, of the crippled IL&FS group to disclose their assets and restrained them from selling or mortgaging their properties till the next date of hearing. The bankruptcy court gave them three weeks to file response and declare their assets and fixed the next hearing on January 16, 2019. The court however, did not allow the government submission for freezing their accounts. The Mumbai bench of the NCLT passed the interim order while hearing a fresh affidavit moved by the corporate affairs ministry that sought to freeze the accounts of these former top management of the IL&FS group, which was taken over by the government on October 1, following a string of defaults by its subsidiaries. In the additional affidavit submitted Monday, the ministry added six more names of past senior management.
The fresh affidavit was necessitated after the Serious Frauds Investigation Office (SFIO) submitted an interim report which cited fraudulent activities by the past management. The ministry demand for freezing their accounts was based on the SFIO findings. An NCLT bench, headed by judges VP Singh and Ravikumar Duraisamy, passed the interim order against these nine former top executives.
The hearing was slated for pre-noon, but most of these affected parties sought time to go through the papers against them and thus the hearing was conducted in the evening. The affected parties include the ousted chairman Ravi Parthsarthy, the past vice-chairman and managing director Hari Sankaran; Arun K Saha, the past company secretary; and the ex-managing director Ramesh Chander Bawa. Others who have been restrained from selling/mortgaging assets and to disclose income include K Ramachandaran, a former vice-president in-charge of administration; an ex-non-executive director Pradeep Puri; S Rangarajan, the past managing director and chief executive of IL&FS Securities Services; Mukund Sapre, who was an executive director at IL&FS Transportation Networks and also the managing director of IL&FS Engineering; and Vaibhav Kapoor, a ex-non-executive director.
The bench asked them to restrain from disposing of or creating any third-party rights on their properties till January 16. Giving them three weeks to file their replies and two weeks to submit rejoinders if any, the court told the government counsel that it cannot pass any order before giving them an opportunity to respond. The cash-starved company, which owes over Rs 94,300 crore to dozens of creditors, has been defaulting on bank loans and other debt repayments since the last week of August. So far, the group and its 348 subsidiaries have defaulted on repayments worth Rs 5,000 crore.