The Supreme Court has sought response from the central government, the Institute of Chartered Accountants of India, Sebi and others on appeals filed by network firm of Deloitte, the former auditor of IL&FS Financial Services (IFIN), and its chartered accountants questioning the National Company Law Tribunal's jurisdiction to prosecute and ban the past auditors for their alleged role in financial irregularities at the company.
Lenders to IL&FS' Jammu tunnel project have approved a proposal to appoint a valuer, forensic auditor, and ratings firm for restructuring the debt of the company, according to a stock exchange disclosure by IL&FS Transportation Network (ITNL) on Tuesday. ITNL has proposed a debt recast of Rs 5,454 crore loans to Chenani Nushri Tunnelway Ltd (CNTL), its special purpose company that constructed India's longest tunnel.
To speed up the debt resolution for the IL&FS group entity CNTL, the lenders led by State Bank of India will meet shortly to evaluate and vote on the new resolution plan that the firm has proposed at a valuation of Rs 5,257 crore. CNTL, which owes a little over Rs 5,500 crore to the lenders, had entered into a share sale agreement with the Singaporean infra major Cube Highways & Infrastructure in August 2020 for a Rs 3,900 crore deal. However, the agreement lapsed last August following which the management appointed an external valuer.
The committee of creditors (CoC) of IL&FS Financial Services, has rejected the offer of UV Asset Reconstruction Company (UVARC) to buy the former's assets. UVARC had offered to pay Rs 370 crore for the Rs 4,300-crore loan book. The CoC has communicated to the IFIN management that it should try to recover loans on its own rather than selling them to an ARC. A spokesman for IL&FS confirmed the development.
An increase in valuation from Rs 450 crore to Rs 3,000 crore in less than a month — this is not a startup, but a property of ABG Cement Ltd, a sister concern of the scam-ridden ABG Shipyard Ltd, that the official liquidator attached to the Bombay High Court is trying to sell to help creditors recover money from the company In a filing before the Bombay High Court on December 8,2021, the official liquidator had asked the court to direct the Enforcement Directorate (ED) to allow the sale a Surat-based cement plant of ABG Cement, which the agency had attached in January 2021, following its probe into the collapse of IL&FS. At the time of the filing, the liquidator said it had found a buyer who was ready to pay Rs 450 crore for the plant but the ED objected to the sale as the attached property was fairly valued at Rs 952 crore. The ED on December 22,2021, asked the High Court to not allow the sale at such a low price.
he forensic audit report of IL&FS Transportation Networks (ITNL) and its special purpose vehicles (SPVs) by Grant Thornton, shows gross financial mismanagement, withdrawal of funds from projects by ITNL leading to large cost overruns and accounting manipulation. The report found that road projects had to suffer Rs8,077 crore cost overrun, largely due to funds being taken out by ITNL. Interest cost overruns of Rs3,433.42 crore were one of the significant components of project cost overruns contributing 42% of the total project cost overruns. The mechanism of this is as follows: IL&FS initially advanced loans at 10% to the SPVs. These loans were later assigned to other lenders. The assignment resulted in effect where SPVs had borrowed funds from the new lenders and repaid the loans taken from ITNL. The SPVs were charged an interest rate of 14-16% on loans assigned by ITNL against the 10-12% charged by ITNL earlier. The interest was to be borne by the SPVs, resulting in a cost overrun of Rs3,433 crore.
The report on the forensic audit of IL&FS Transportation Networks (ITNL) and its special purpose vehicles (SPVs) by Grant Thornton reveals that the road projects had to face a Rs 8,077-crore cost overrun. This was largely due to funds being taken out by ITNL. The group's transport arm took out the money from the road projects by charging excess project development and project management fees (PDF & PMF) and using fee money to make equity contributions to these SPVs. ITNL also assigned loans it had advanced to these projects to other lenders at higher rates.
State-owned Indian Oil Corporation (IOC) is exploring the option to acquire IL&FS Paradip Refinery Water Ltd, the crisis-hit IL&FS has said in an affidavit filed before the insolvency appellate tribunal NCLAT. However, the Uday Kotak-led board has not shared any financial details while updating the tribunal on the progress of the groups resolution process.
Global investment firm KKR, through an affiliate entity, is set to acquire crisis-hit non-banking finance company Infrastructure Leasing & Financial Services' (IL&FS) stake in Bangalore Elevated Tollway Private Ltd (BETPL). Galaxy Investments, a wholly-owned subsidiary of KKR Asia Pacific Infrastructure Holdings, has entered definitive agreement with UK's development finance institution CDC's India Infrastructure Fund II to acquire a stake in the company.
Public Sector Punjab & Sind Bank (PSB) on Tuesday said it has declared bad asset IL&FS Tamil Nadu Power Company, with dues of over Rs 148 crore, as a fraud account and reported it to the Reserve Bank. As per the bank's policy on determination and disclosures on material events, PSB said it has declared this non-performing account as a fraud account. "It is informed that an NPA account, viz IL&FS Tamil Nadu Power Company Ltd with outstanding dues of Rs 148.86 crore has been declared as fraud and reported to RBI today as per regulatory requirement," the lender said in a regulatory filing.