IL&FS Scam: Govt Seeks 270 More Days for Completing Resolution of 105 Group Companies
Moneylife Digital Team 12 February 2020
The Ministry of Corporate Affairs (MCA) has requested the National Company Law Appellate Tribunal (NCLAT) to give additional 270 days for completing resolution of 105 companies of the scam-hit Infrastructure Leasing & Financial Services (IL&FS) group. In an affidavit, the MCA also requested NCLAT to release 55 other entities from moratorium, so that they can discharge their debt obligations. 
 
The affidavit states, "...for the remaining 105 domestic group entities, extend the scope and operation of the order passed by this Tribunal on 15 October 2018 for an additional period of 270 days from the date on which the resolution framework is approved by this Tribunal, to enable the New Board to successfully complete the resolution of IL&FS."
 
"...release Lalpur Wind Energy Pvt Ltd, Etesian Urja Ltd, Khandke Wind Energy Pvt Ltd, Ratedi Wind Power Pvt Ltd, Wind Urja India Pvt Ltd, Tadas Wind Energy Pvt Ltd, Kaze Energy Ltd, Jharkhand e-Governance Solutions & Services Ltd, Infrastructure Development Corp of Assam Ltd and the 55 entities listed in 11 of January 2020 Affidavit from the scope and operation of the order passed by this Tribunal on 15 October 2018," the MCA requested the NCLAT in its affidavit filed on 7 February 2020.
 
IL&FS on 15 October 2019 had sold its stake in seven companies Lalpur Wind Energy, Etesian Urja, Khandke Wind Energy, Ratedi Wind Power, Wind Urja India, Tadas Wind Energy and Kaze Energy Ltd to Japanese ORIX Corp. The registrar of companies on 17 May 2019, had removed from its records Jharkhand e-Governance Solutions & Services. Also as per the order from NCLT's Guwahati bench, Infrastructure Development Corp of Assam has been dissolved.
 
The NCLAT in its order on 15 October 2018 had stayed all proceedings against IL&FS group companies. The IL&FS group has a total debt of Rs94,215 crore.
 
As per the 7th February affidavit of MCA, the total debt of IL&FS includes Rs10,173 crore or about 10.8% from public creditors like pension funds, provident funds, employee welfare funds, gratuity funds and army group insurance funds. The share of commercial bank in IL&FS debt is about 47% or Rs44,075 crore. 
 
 
Additionally, total debt of four key companies of IL&FS group is nearly 51% or Rs48,000 crore. These key companies are IL&FS, IL&FS Financial Services, IL&FS Transportation Networks Ltd (ITNL) and IL&FS Energy Development Co Ltd (IEDCL).
 
 
According to the MCA affidavit, these four key companies gave loans of Rs26,154 crore to other group companies from the IL&FS group. Other group companies gave a loan of Rs32,836 crore to IL&FS itself. 
 
Earlier in December, addressing shareholders at the at the annual general meeting (AGM) Uday Kotak, chairman of IL&FS had said that IL&FS is committed to completing the resolution process at the earliest and is working towards addressing significant portion of addressable debt by July 2020.
 
According to Mr Kotak, resolution, restructuring and recovery formed the three vital pillars of the strategy adopted by the new board of IL&FS. "Measures undertaken by the new board of IL&FS would result in overall recovery in the region of 50% of the outstanding debt as of 30 September 2018 but different across levels as well as entities," he had said. (Read: IL&FS Board Working towards Reducing Significant Debt by July 2020: Uday Kotak)   
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