NCLAT Proposes Oversight By A Supreme Court Judge For IL&FS Asset Sale

National Company Law Appellate Tribunal (NCLAT), an appellate tribunal, proposed on Friday (11 January) that a retired Supreme Court (SC) judge should oversee the sale of assets by the financially-stressed Infrastructure Leasing and Financial Services Ltd (IL&FS), reports Mint.

The appellate tribunal will suggest to the government and IL&FS to get the matter supervised by a retired Supreme Court judge,” remarked a two-judge bench. “IL&FS will provide details of all arbitral proceeding against it and its 348 subsidiaries,” the bench added.

It was reported on 2 January (2019) that the debt-laden non-banking financial company (NBFC) major, IL&FS, had invited bids to sell its real estate assets to raise funds and trim its massive debt.

The company is also looking for buyers for its road assets constructed under the engineering, procurement and construction (EPC) model. Its operation and maintenance (O&M) businesses are on sale too.

However, it clarified yesterday (11 January) that it would neither indemnify nor provide warranties to potential buyers willing to buy its assets.

September crisis

IL&FS, one of India’s top NBFCs that lent heavily to big infrastructure projects, defaulted on its loan repayments in September 2018. This default triggered a market-wide liquidity crisis in the Indian financial system. The company has an accumulated debt of Rs 91,000 crore.

Following the takeover, the government moved swiftly and replaced the company’s board with its nominees, including Uday Kotak, the government's banking crisis manager.

Also Read: IL&FS Rescue: A Direct, But Temporary, Government Takeover May Be Less Expensive