New board to execute IL&FS' revival plan in 6-9 months

"The government has set an informal time period of six months for reviving the company. However, board has decided to do it by early January,” a source told Moneycontrol.

Tarun Sharma

October 31, 2018 / 20:46 IST

IL&FS Transportation Networks | The company defaulted on the interest on non-convertible debentures due on August 25, 2020. (Image: Reuters)

The new board of Infrastructure Leasing & Financial Services Limited (IL&FS) hopes to complete the resolution process within six to nine months, the company said in a release.

The Ministry of Corporate Affairs on October 31 presented a report card prepared by the new board on the progress of the resolution plan to the National Company Law Tribunal Mumbai bench.

The report provides an overview of the magnitude and complexity of the issues involved, key developments since October 1, 2018, relating to the IL&FS Group, and the possible timelines, among other things.

The IL&FS board is considering three options to resolve the group’s distress -- resolution at a group level, a sale of business verticals and sale of individual assets, Sanjay Shorey, the lawyer representing the government and Manmohan Juneja, Western Regional Director, MCA, told the NCLT.

"The audit committee is thinking of a special audit on past management’s action. New board was unable to validate if due process was followed for asset sale by dismissed management," Shorey told NCLT.

"IL&FS Financial Services had outstanding loans to group companies beyond permissible limit and money was circulated among group companies to avoid regulatory radar,” he said.

The new board has taken austerity measures, which include taking control over payments of Rs 1 crore or above.

Next hearing of this matter is on December 3. The court has asked the new board to include all 346 subsidiaries as part of the resolution plan within the next 15 days.