NCLT bars IL&FS ex-officials from selling assets

By: | Updated: December 4, 2018 7:17 AM

The Mumbai bench of National Company Law Tribunal (NCLT) on Monday passed an order barring nine former officials of IL&FS Group from selling or pledging any of their personal assets.

The bench said the officials are restrained from creating mortgage, lien, charge or alienating any of their personal properties, as well as dealing with any securities in any company till the next date of hearing, which is December 16.

The Mumbai bench of National Company Law Tribunal (NCLT) on Monday passed an order barring nine former officials of IL&FS Group from selling or pledging any of their personal assets.

Acting on an application by the ministry of corporate affairs (MCA) that was based on a preliminary report by the Serious Fraud Investigations Office (SFIO), the NCLT bench, after a marathon three and a half hours hearing, directed former officials Ravi Parthasarathy, Hari Sankaran, Arun Saha, Vibhav Kapoor, K Ramchand, RC Bawa, Mukund Sapre, Pradeep Puri and S Rangarajan to also disclose their movable and immovable properties, including bank accounts in India and abroad.

The bench said the officials are restrained from creating mortgage, lien, charge or alienating any of their personal properties, as well as dealing with any securities in any company till the next date of hearing, which is December 16.
Sanjay Shorey, counsel for MCA, said, the SFIO has found indications of fraud; that IL&FS had procured funds from the market through short-term instruments and invested them in its group companies by way of giving long-term loans and advances, which was prejudicial to its own interests in terms of solvency. The short term debt would mature immediately whereas no sources were available for servicing of the matured short term debts as the funds were blocked in long-term loans. Shorey said the company owed about Rs 499.25 crore in commercial papers in FY17 which increased to Rs 2,007.29 crore in FY2018. Inter-corporate deposits stood at Rs 459.20 crore in FY17 which increased to Rs 1,100.35 crore in FY2018.

Shorey also said that ever-greening arrangements were observed in case of loans provided to IL&FS Group companies and others such as Ind-Bharath Group, Gayatri Group and A2Z Group, among others. He said serious discrepancies in financial transactions have also been observed with respect to the IL&FS Employee Welfare Trust (EWT), which seemed to have been a mechanism for benefiting a select group of senior management.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Switch to Hindi Edition