NCLT Seeks Details Of Personal Assets Of Nine Former IL&FS Executives
The NCLT temporarily restrained nine former senior executives of insolvent Infrastructure Leasing & Financial Services Ltd. being probed by the serious frauds office from selling or pledging their personal assets and securities.
The Mumbai bench of the National Company Law Tribunal, in an interim order, asked them to disclose their assets including bank accounts, lockers and personal properties in and outside India. The NCLT, giving them three weeks to reply, restricted them from dealing with any securities of any company till Jan. 16 when the matter will be heard again.
Three of the nine named by the Serious Frauds Investigation Office in a report prepared on Nov. 30 were accused by the government of mismanagement at IL&FS. They are Ravi Parthasarathy, former chairman who resigned in July; Hari Sankaran, former vice-chairman and managing director; and Arun K Saha, joint managing director and chief executive officer. The other six named by SFIO include:
- Vibhav Kapoor, chief investment officer and chairman of Employee Welfare Trust of IL&FS Group
- K Ramchand, managing director of IL&FS Transportation Network Ltd.
- RC Bawa, MD of IL&FS Financial Services Ltd.
- S Rangarajan, MD & CEO of IL&FS Securities Services.
- Pradeep Puri, non-executive director.
- Mukund Sapre, executive director, IL&FS Transportation Network.
The SFIO is probing alleged financial irregularities within the group. Multiple debt defaults at IL&FS and its subsidiaries roiled India's credit markets, forcing the government to take control of the infrastructure conglomerate to contain a contagion. The new board, led by veteran banker Uday Kotak, found that the group was far more complex than expected with 348 associates and subsidiaries and had a total debt of about Rs 91,000 crore. The board has already invited buyers for some of the assets as part of its resolution plan.
The SFIO alleged that the nine executives, who were the key decision makers, misstated profits to hide the group's poor financial health to obtain higher credit ratings and raise debt, and “reap personal benefits by way of high managerial remunerations”. Sankaran, Saha, Puri, Ramchand and Sapre formed a separate committee of directors to take all operational decisions regarding credit and investments in subsidiaries, the SFIO alleged.
The agency couldn't locate more than 39 overseas subsidiaries of the IL&FS Group. The NCLT asked the Ministry of Corporate Affairs to submit a detailed affidavit within 15 days explaining how these companies had vanished.
Also Read: Debt-Laden IL&FS Group Submits Revival Roadmap To NCLT
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