In a first, govt moves to re-open IL&FS’ balance sheets to probe financial wrongdoing

New Delhi: The government has invoked for the first time powers under Section 130 of the New Companies Act 2013 to re-open the books of debt-ridden Infrastructure Leasing and Finance Group (IL&FS) and its subsidiaries spanning over the last five years in order to probe financial mismanagement. The news was out when the Ministry of Corporate Affairs moved the National Company Law Tribunal (NCLT) on December 21. Under the scanner are balance sheets of the debt-ridden group and two listed subsidiaries — ITNL and IL&FS Financial Services.

The SFIO has also uncovered serious wrongdoing on the part of the past management of the embattled group, ranging from misreporting of income, dubious transactions, conflicts of interest deals, ever-greening of loans and deals that led to personal enrichment for some key employees.

The process was initiated after the Serious Fraud Investigation Office (SFIO) found alleged instances of corruption, personal enrichment and other non-transparent deals in the company's books.

The SFIO has also uncovered serious wrongdoing on the part of the past management of the embattled group, ranging from misreporting of income, dubious transactions, conflicts of interest deals, ever-greening of loans and deals that led to personal enrichment for some key employees. The corporate affairs ministry submitted the SFIO interim report to NCLT on December 3.

The NCLT has, however, refused to pass an intermediate order on the case, contending that it will have to seek the opinion of the Reserve Bank of India, SEBI and the Income Tax Department on the matter.