NEW DELHI: Pressure is mounting on Finance Ministry to investigate irregularities into the account books of Infrastructure Leasing & Finance Services Ltd (IL&FS), after whistleblowers have written to the ministry alleging corruption to the tune of Rs 91,000 crore and warned the state-run Life Insurance Corporation of India (LIC) and State Bank of India (SBI) against infusing more capital into the company.
“Apart from whistleblowers, several agencies have pointed out irregularities in the account book. The RBI is already looking into the books of IL&FS and the matter is already being monitored by the Securities Exchange Board of India and the Ministry of Corporate Affairs. The government is keeping a watch over it. It is very likely that matter will be referred for an internal probe,” said a senior official from the Finance Ministry, refusing to divulge further details.
After the rating agency ICRA Limited downgraded IL&FS over financial crunch, whistleblowers have written to Finance Minister Arun Jaitley on September 14, accusing it of “siphoning off funds and manipulating accounts”.
The IL&FS group defaulted on payment of many banks as a significant percentage of its liquidity, to the tune of Rs 16,000 crore, was said to be stuck in claims and termination payments, which resulted in the downgrading of loans and debentures of IL&FS and its several group entities to ‘non-investment grade’.
At the end of March 2018, the gross debt of IL&FS was about Rs 91,000 crore.
Eyebrows were raised when LIC, the largest shareholder in IL&FS with 25.34 per cent stake as on March 31, 2018, came to the beleaguered company’s rescue, announcing an immediate financial assistance to it to tide over the liquidity problem.
However, whistleblowers have claimed that this financial crunch is a massive scandal of over Rs 91,000 crore.
“IL&FS is using a unique modus operandi of operating through a complex web of 225 group companies - all of which are in precarious financial condition. A majority of IL&FS operations are in forms of related party transactions, which accounts for unprecedented 71 per cent of total operations,” the letter reads.
It further alleges that IL&FS was involved in land scams in Odisha, Nagaland, Rajasthan and Madhya Pradesh.
Finance Minister Arun Jaitley on Monday dismissed questions over the IL&FS mess, adding that the government will not intervene in the issue now and will let the company’s Board and stakeholders to deal with the debt crisis.
“I am not making any comments on this. Let their Board and stakeholders deal with the matter,” Jaitley had said.