NCLAT offers IL&FS Sec MD monthly Rs 2 lakh withdrawal but upholds NCLT asset-freeze order

Previously, the NCLT had passed a similar order for PNB, after the $2 billion fraud, barring independent directors from selling their assets.

On the same day, the government-appointed board of IL&FS also unanimously approved the suspension of Rengarajan from the board of IL&FS Securities.

Besides Rengarajan, the executives whose assets were attached by the NCLT on December 3 include RC Bawa, Managing Director of IL&FS Financial Services; Pradeep Puri, Director and member of Committee of Directors responsible for sanctioning loans; and Mukund Sapre, Executive Director of ITNL. Ravi Parthasarathy, Hariharan and Arun Saha are the three other former directors whose properties have been seized.

Infrastructure financier IL&FS, which has racked up a debt of about Rs 92,000 crore, defaulted on interest payments in September, sparking fears of a contagion in the system.

The government, which has started several probes into the company, has said the case goes beyond mere failure and there is evidence of institutional fraud.

"IL&FS used a circuitous way to pay off loans of its own entities to meet RBI guidelines and used this method to obtain a high credit rating, and high managerial remuneration,” the government counsel argued in court recently.

At the same time, senior executives -- such as IL&FS Chairman Parthasarathy, whose remuneration increased 144 percent in FY18 – have been accused of enriching themselves unfairly at the cost of the company and junior employees.