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NCLAT removes mortarium on 22 Indian, 133 foreign subsidiary of IL&FS

FE Bureau
Investors require clarity on IL&FS, IL&FS, IL&FS NEWS

The National Company Law Appellate Tribunal (NCLAT) on Monday lifted the debt moratorium on 133 offshore group entities of IL&FS, partially reversing an earlier decision on October 15 last year.

Besides, a two-member bench headed by Justice SJ Mukhopadhaya approved the appointment of former Supreme Court judge Justice DK Jain to supervise resolution process of IL&FS group.

On October 15, the NCLAT had allowed an interim moratorium to IL&FS and its 348 group entities, granting it permission to delay its financial obligations arising from term loans, commercial paper and fixed deposits and any creditor action against the company.

The NCLAT also directed 22 domestic subsidiaries of IL&FS to continue to service their operational and financial debt repayments. The direction comes after Jharkhand Road Projects Implementation Company (JRPICL), a subsidiary of IL&FS Transportation Networks (ITNL), did not pay the interest and principal obligations of Rs 76 crore due on January 21, resulting in a ratings downgrade and concerns among investors regarding the sanctity of contractual agreements between borrowers and their lenders.

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Also on Monday, complying with the previous NCLAT order dated February 4, the ministry of corporate affairs (MCA) classified a list of IL&FS entities based on their stress positions.

ICAI Accounting Research Foundation to oversee reopening of IL&FS books.The ICAI Accounting Research Foundation (ICAI ARF) will oversee the process of reopening the books of crisis-hit IL&FS.

The board of debt-laden Infrastructure Leasing and Financial Services (IL&FS) was taken over by the corporate affairs ministry last year after many group entities defaulted on their debt obligations.

In a release, the Institute of Chartered Accountants of India (ICAI) Monday said ICAI ARF has been assigned the task of reopening of the books of IL&FS.

An official said ICAI ARF, a not-for-profit entity, would oversee the process of reopening the books of IL&FS along with the ministry.