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NCLAT wants a former SC judge to watch IL&FS asset sales

PW Bureau 

With an accumulated debt of more than ₹91,000 crore, defaults on some of IL&FS’ debt triggered sharp falls in stock and debt markets, prompting the government to supersede the board last year 

New Delhi: The National Company Law Appellate Tribunal (NCLAT) has said it will recommend a retired Supreme Court judge to the Centre to oversee all further proceedings for the transfer of assets of India’s ailing Infrastructure Leasing and Financial Services Ltd (IL&FS). With an accumulated debt of more than Rs 91,000 crore, defaults on some of IL&FS’ debt triggered sharp falls in stock and debt markets, prompting the government to supersede the board last year.

The move will perhaps impact the implementation of asset sales that IL&FS’ newly-appointed board is undertaking with a view to revive the company.

“As it appears that a process is required to be followed, similar to corporate insolvency resolution process, for the purpose of proper resolution of IL&FS and its subsidiaries,” said a two-member NCLAT bench headed by its chairperson, Justice SJ Mukhopadhaya. “Appellate Tribunal will suggest to the government and IL&FS to get matter supervised by a retired SC Judge.”

IL&FS is now taking up a sequence of asset monetisation programmes, which comprises the sale of its renewable energy assets, EPC capabilities, securities business and roads portfolio, to pay off its debt.

The appellate tribunal also instructed IL&FS to provide details of all arbitral proceedings against the company and its 348 subsidiaries.

“IL&FS will provide details of all arbitral proceeding against it and its 348 subsidiaries,” the bench said. The next hearing has been listed for January 28.