New IL&FS  Board does not rule out possibility of fraud

Meanwhile, the new management Board also said that in order to keep the company afloat, it would require `100 crore per month.

Published: 11th October 2018 04:00 AM  |   Last Updated: 11th October 2018 04:00 AM   |  A+A-

Uday Kotak

IL&FS chairman Uday Kotak (L) and vice-chairman Vineet Nayyar

Express News Service

NEW DELHI: The Ministry of Corporate Affairs (MCA) on Wednesday said that the newly appointed Board of Infrastructure Leasing & Financial Services Ltd (IL&FS), which gave its first-hand assessment on the crisis involving the company, has not ruled out the possibility of fraud in certain group firms. The Board is planning to hire an independent agency for a fair probe into the dealings, MCA said.

The newly appointed chairman of IL&FS, Uday Kotak, and vice-chairman, Vineet Nayyar, on Wednesday met secretary of Ministry of Corporate Affairs and briefed about the crisis.“The progress so far is good. The Board members have not ruled out the possibility of fraud in the preliminary assessment. While SFIO (serious fraud investigation office) is already probing the case from their end, the new Board may soon appoint some independent agency for a fair and impartial probe into the matter. The matter is complicated because there are too many subsidiaries and a large amount of internal transactions,” a senior official at MCA told TNIE.

Earlier, there were reports that the SFIO has focused its probe on five group companies including IL&FS Transportation Networks, IL&FS Financial Services, IL&FS Energy Development, IL&FS Tamil Nadu Power and IL&FS Engineering and Construction for alleged diversion of funds worth Rs 30,000 crore.  

The report, citing two government officials aware of the initial probe conducted by the investigating agency, said that these companies diverted funds worth Rs 30,000 crore.

Meanwhile, the new management Board also said that in order to keep the company afloat, it would require Rs 100 crore per month. “Internal assessment says that the company would require Rs 100 crore per month to keep afloat.  

The Board may take some critical decisions including drastic cutting of cost, capping unreasonable perks and other wasteful expenditures. It is likely to meet next week to discuss the road ahead for the company,” the official added.

In order to take critical decisions, the Board members have already been granted immunity against legal azxtions. The government had, on October 1, taken over the management of the debt-ridden IL&FS group, replacing its 15-member Board and replaced it with a six-memberBoard.

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