Lok Sabha Question No. 4699 (UNSTARRED), answered on 2019-07-22
Subject: Capital Infusion in IL&FS
Ministry: CORPORATE AFFAIRS
Asked by: Dayanidhi Maran, Vinod Kumar Sonkar, Sukanta Majumdar

## GOVERNMENT OF INDIA

## MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO. 4699

ANSWERED ON MONDAY, THE 22 nd  JULY, 2019/ASHADHA 3, 1941 (SAKA)

## CAPITAL INFUSION IN IL&FS QUESTION

4699. Shri DayanidhiMaran:

Shri Vinod Kumar Sonkar:

Dr. SukantaMajumdar:

Will the Minister of CORPORATE AFFAIRS be pleased to state:

कारपोरेट कार्य मंत्री

- (a) Whether the revival and capital infusion plans being proposed by  the  Government  towards  resolution  of  the  Infrastructure Leasing  and  Financial  Services  Ltd.  (IL&FS)  issue  along  with action is being taken against large defaulters;
- (b) whether  the Government  has  directed  the Serious Fraud Investigation  Office  (SFIO)  to  probe  banks  as  well  as  their officials/  NRI  defaulters  who  lent  to  the  IL&FS  group  of companies; and
- (c) if so, the details thereof along with the steps taken/being taken by the Government in this regard?

## ANSWER

THE MINISTER OF STATE FOR FINANCE

AND CORPORATE AFFAIRS

वित्त एिं कॉरपोरेट कार्य मंत्रालर् में राज्र् मंत्री

(SHRI ANURAG SINGH THAKUR)

(श्री अनुराग स ंह ठाक ु र)

(a) to (c) There is no fresh capital infusion proposed in the Resolution Plan submitted to the NCLT by the IL&FS. Due to continuous failure of the Infrastructure Leasing and Financial Services Ltd. (IL&FS) to service its  debt  and  imminent  possibility  of  contagion  effect  in  the  financial market,  the  Central  Government  moved  an  application  under  Sections 241 and 242 of the Companies Act, 2013 before the National Company Law Tribunal (NCLT), Mumbai Bench for taking management control. The NCLT,  Mumbai  Bench  vide  its  order  dated  01/10/2018  approved  the application  filed  in  this  regard,  by  suspending  the  erstwhile  board  of directors  of  IL&FS  and  appointed  its  nominees  as  directors,  who  have been  tasked  with  the  orderly  resolution  of  the  IL&FS  and  its  group companies. The entire process is being carried out under the supervision of  the  NCLT.  In  order  to  ensure  period  of  calm  during  the  resolution process, a moratorium was sought against the creditors, which has been granted  on  interim  basis  by  the  National  Company  Law  Appellate Tribunal (NCLAT) until further orders. Justice (Retd.) D.K. Jain, Supreme Court  of  India  has  been  appointed  by  the  NCLAT  to  oversee  the monetization  and  resolution  of  the  assets  of  IL&FS  and  its  group companies. Besides the resolution of the company, the Central Government has ordered investigation to be carried out by the Serious Fraud Investigation Office (SFIO) into the affairs of IL&FS  Ltd. and  its subsidiary companies on 30/09/2018. The SFIO has, so far, submitted its 1st  Interim  Report  dated  30/11/2018  and  its  2nd  Interim  Report  dated 28/05/2019, which have been filed before the NCLT. In  pursuance  of  the  interim  reports  filed  by  SFIO,  the  Central Government  had  sought  relief from the NCLT  for restraining the suspects/respondents identified by SFIO, from alienation of their moveable  and  immoveable  properties.  In  addition  to  the  above,  the Central  Government  has  also  filed  a  contempt  petition  against  certain additional respondents for violation of the orders of restraint passed by the NCLT. The NCLT has, till date, restrained the following respondents

from alienating their moveable and immoveable properties:

|   S. NO. | NAME OF RESPONDENT   |
|----------|----------------------|
|        1 | HariSankaran         |
|        2 | Arun K Saha          |
|        3 | Ravi Parthasarathy   |
|        4 | Vibhav Kapoor        |
|        5 | K Ramchand           |

|   6 | Ramesh C Bawa   |
|-----|-----------------|
|   7 | Pradeep Puri    |
|   8 | S Rengarajan    |
|   9 | MukundSapre     |
|  10 | Asha KiranBawa  |
|  11 | AakankshaBawa   |

Further, based on the 2nd Interim Report dated 28/05/2019 submitted  by  SFIO,  the  Central  Government  has  also  filed  a  petition under Section 140(5) of the Companies Act, 2013 against the Statutory Auditors  of  IL&FS  Financial  Services  Ltd.,  for inter  alia  seeking  the removal  of  the  statutory  auditors  and  banning  them  for  a  period  of  5 years. Furthermore, SFIO has filed a complaint before the Special Court at Mumbai against IL&FS Financial Services Ltd. and its directors, certain officers and also against its auditors, under Sections 447, 36 r.w. 447, 143  r.w.  147,  129  r.w.  448  and  184(4)  of  the  Companies  Act,  2013, Sections  68  r.w.  211  and  628  of  the  Companies  Act,  1956  r/w  various sections of the Indian Penal Code, 1860. The  Central  Government  has  also  filed  an  application  before  the NCLT for impleading the accused, named by SFIO in its complaint before the  Special  Court  at  Mumbai,  as  respondents  in  its  petition  before  the NCLT and has sought relief for restraining the additional suspects/respondents from alienation of their moveable and immoveable properties. Investigation  under  section  212  of  the  Companies  Act,  2013 assigned to Serious Fraud Investigation Office (SFIO) is into the affairs of IL&FS and its subsidiary companies. Further, it also includes investigation into related body corporate or any person etc. Accordingly, SFIO is free to probe the officials/ NRIs/defaulters who have lent money to the IL&FS group companies. Lastly, the investigation by the SFIO is under way and the matters before the NCLT, NCLAT and Special Court, Mumbai are sub-judice.

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