IL&FS Case on fraud of PPF judgement by supreme court

ILFS case ppt

1. IL&FS Case – Overview NCLT : In January 2019, NCLT ordered IL&FS group firms, ITNL and IFSL to recast financial statements for FY 2013 to 2018 The original account had to be superseded following the unearthing of massive irregularities NCLAT : NCLAT conceived a framework for resolution It also granted protection to IL&FS group against recovery of further dues and immunity to newly appointed Directors of IL&FS against any proceedings for past actions of suspended Directors or any of the officers As per the roadmap for IL&FS, its group companies were categorised into three categories -- green, amber and red -- based on their respective financial positions. IL&FS IL&FS Financial Services Limited (‘IFSL’) IL&FS Transportation Networks Limited (‘ITNL’) *Over 250 subsidiaries ~71% ~100% SFIO arrests Hari Sankaran: Former Vice Chairman of IL&FS was arrested in April 2019, on grounds of fraud and wrongful losses to lenders Auditing firms KPMG and Deloitte fined : Heavy monitory fines and bans imposed ED raids MCA orders IL&FS group to recoup director remuneration : Based on restated financials as mandated by NCLAT, IL&FS financials which earlier stated a profit of INR ~1,900cr., now showed a loss of INR 9,600cr. In May 2024, MCA ordered IL&FS to recoup remunerations to the tune of INR 150cr. Shelled out during the period of financial irregularities Indian state-funded infrastructure development and finance company, created by public sector banks and insurance companies.

2. AUGUST 2018 IFSL delays payment to commercial paper investors – few hundred crores, by 2 days 1-11 SEPTEMBER 2018 Group entities default on dues worth INR 1,500cr. Owed to SIDBI Ratings downgraded to ‘junk’ status RBI initiates special audit 27-30 SEPTEMBER 2018 Funds raised from existing shareholders OCTOBER 2018 Government assumes control and appoints Uday Kotak as Chairman JUNE 2018 ITNL defaults on INR 450cr. ICD from SIDBI ICRA, CARE downgrade ratings 12-26 SEPTEMBER 2018 Short term loans defaulted on worth INR 440cr. ILFS seeks relief from NCLT Fear of widespread debt market crisis due to systemic exposure IL&FS Case – Timeline of defaults and action Defaults involved - INR ~ 95,000 crores Debt resolution as of July 2024 – INR ~ 36,000 crores Targeted resolution – INR ~ 61,000 crore IL&FS group is resolving debts through monetisation and settlement of payments by group entities from the concessioning authorities and counterparty to the relevant contract. PRESENT

3. Companies Act - Managerial Remuneration and Rationale In case of no profit or inadequate profits: -