Parliamentary panel on finance to probe IL&FS issue, says Veerappa Moily

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

Former union minister and senior Congress leader Veerappa Moily has said that the Parliamentary Standing Committee on Finance will take up the case of debt-ridden Infrastructure Leasing & Financial Services (IL&FS) for scrutiny, according to a report by The Economic Times.

Moily heads the parliamentary panel on finance.

"Whatever has happened at IL&FS is a matter of grave concern. It is a fit case for the Parliamentary Standing Committee on Finance to look into. As the chairman, I will take up the matter in the committee meeting," Moily told the newspaper.

"How did IL&FS run up such huge debt? And, what were the people who had been entrusted with the responsibility of managing its affairs doing? It is also another case of first government letting a public limited company go completely sick and then trying to do damage control," Moily said.

The development comes days after the Centre suspended IL&FS' board of directors and nominated six new directors to run the company. The infrastructure financier recently defaulted on some of its debt obligations.

The National Company Law Tribunal (NCLT) had approved the takeover of IL&FS by government nominees, saying mismanagement at the crisis-ridden financier makes it a fit case of supersession of the board under Article 241 of the Companies Act.

The Congress had earlier hit out at the government and had demanded a Supreme Court-monitored multiple-agency probe into all issues pertaining to IL&FS.

Moily also told the newspaper that the parliamentary committee on finance had taken up the bad loans issue and that the IL&FS case falls within its scope.