The National Company Law Appellate Tribunal (NCLAT) on Friday suggested that all further proceedings for the transfer of assets of debt-laden Infrastructure Leasing and Financial Services Ltd (IL&FS) should take place under the supervision of a retired Supreme Court judge.
“The appellate tribunal will suggest to the government and IL&FS to get the matter supervised by a retired Supreme Court judge,” said a two-member NCLAT bench headed by its chairperson, Justice S.J. Mukhopadhaya.
The move is likely to impact the implementation of asset sales that the newly appointed board of IL&FS is undertaking with the aim of reviving the company.
Infrastructure Leasing and Financial Services has accumulated a debt of more than ₹91,000 crore and defaulted on some of its commitments.
The road assets, classified under the domestic roads vertical of Infrastructure Leasing and Financial Services, which include the company’s engineering, procurement and construction (EPC) as well as operation and maintenance (O&M) businesses, have been put on sale as part of the debt resolution plan.
Serial debt defaults at the parent company and its subsidiaries, which triggered a liquidity squeeze in the non-banking financial company sector, prompted the government to supersede the IL&FS board on 1 October 2018.
The group is now undertaking a series of asset monetisation programmes to pay off its debt of ₹91,000 crore. These include the sale of its securities business, renewable energy assets, roads portfolio, and EPC capabilities.
On Wednesday, IL&FS said it had received more than 30 expressions of interest in its road assets, which were being scrutinized.
The appellate tribunal on Friday also ordered IL&FS to submit details of all arbitral proceedings that are underway against the company and its 348 subsidiaries.
“IL&FS will provide details of all arbitral proceeding against it and its 348 subsidiaries,” the bench said while hearing a petition filed by the ministry of corporate affairs (MCA) and IL&FS.
The next hearing has been listed for 28 January, when NCLAT would hear arguments for granting moratorium to Infrastructure Leasing and Financial Services and its group companies.
On 15 October, NCLAT had stayed all proceedings against the IL&FS group and its 348 firms till further orders, over an urgent petition moved by the government.
The ministry of corporate affairs had approached the appellate tribunal after the Mumbai bench of the National Company Law Tribunal turned down its plea for a 90-day moratorium on loans taken by IL&FS and its subsidiaries.
Source: Livemint, January 12, 2019