The previous management of debt-laden Infrastructure Leasing and Financial Services (IL&FS) surreptitiously attempted to hide the dire financial condition of the company, conceal cash flow stress and mislead regulators into adopting a restructuring plan, according to a forensic report reviewed by Moneycontrol. The audit findings by consultancy Grant Thornton (GT) reveal that the management knew about the financial challenges that the group was facing since 2016 and it had also discussed with the Reserve Bank of India (RBI) to make necessary regulatory amendments to facilitate fundraising at the holding company level.
THE National Company Law Tribunal (NCLT) on Wednesday approved the stake sale of IL&FS in Gujarat International Finance Tech-City Company Limited (GIFT City) to the Government of Gujarat for Rs 32.7 crore. The Gujarat International was set up as an equal joint venture between the state government, via Gujarat Urban Development Company Ltd (GURDCL) and IL&FS to develop an integrated township and financial services hub. Last year, the Gujarat government had applied for buying the 50 per cent stake in the joint venture.
Debt-laden IL&FS will sell its entire stake in Gujarat International Finance Tec-City Limited (GIFTCL) to the Gujarat government. IL&FS has a 50 per cent stake in GIFTCL, which comprises a multi-services Special Economic Zone (SEZ) and International Finance Services Centre (IFSC) totaling approximately 6 lakh square feet.
The Gujarat government is set to acquire IL&FS' 50% stake in GIFT City for Rs 32.70 crore exercising its right of first refusal. The court agreed to the deal noting that the sale value was higher than the fair value as the company had a negative equity value as assessed by RBSA advisors. The stake sale in GIFT city is part of the Uday Kotak-led board of IL&FS to liquidate assets of the group which has total debt of nearly Rs 1 lakh crore and has defaulted on its repayment obligations. The sale has been approved by a committee of creditors to who IL&FS owes money
Top executives of a subsidiary of debt-laden Infrastructure Leasing and Financial Services (IL&FS) colluded with a Mumbai-based contractor to hand out lucrative tenders through suspicious transactions and rigged bidding, according to a forensic audit reviewed by Moneycontrol. The findings of the forensic audit by consultancy Grant Thornton of IL&FS Transportation Networks India Limited (ITNL) shed new light on events that led to the financial ruin of IL&FS, which committed a number of defaults and roiled India’s shadow banking sector due to consequent concerns of a larger bad debt crisis. The government was finally forced in 2018 to replace the IL&FS management with a team led by banker Uday Kotak.
The IL&FS group said on Monday that it had invited expressions of interest (Eols) for the purchase of its stake in ONGC Tripura power plant joint venture. The group holds 26 per cent interest in the gas-based power plant. According to people in the know, ONGC could also bid for this stake. In order to monetise the investment made by the IL&FS group in ONGC Tripura Power Company (OTPC), EOIs are invited for the acquisition of its 26 per cent stake, subject to necessary approvals, IL&FS said.
The Bombay High Court on Tuesday cancelled temporary bail granted by a Sessions Court to Hari Sankaran, former Infrastructure Leasing and Financial Services (IL&FS) vice chairman in view of the COVID-19 pandemic. A single-judge Bench of Justice C V Bhadang heard a plea via video conference filed by the Serious Fraud Investigation Office (SFIO), challenging the order passed by the court on April 28 granting Sankaran temporary bail.
In a major step towards resolving around Rs 2,500 crore debt, the PingAn Insurance (Group) Company of China has turned out to be the highest bidder for the IL&FS stake in Chinese Chongqing Yuhe Expressway Co Ltd (CYEL). According to sources, PingAn has bid for the IL&FS stake in CYEL at an aggregate equity valuation of around $250 million, covering 100 per cent debt of CYEL. IL&FS holds 49 per cent stake in CYEL through its Singapore-based subsidiary ITNL International Pvt Ltd. The balance majority stake in CYEL is held by Chongqing Expressway Group.
Chinese insurance major Ping An has emerged as the highest bidder for IL&FS stake in Chongqing Yuhe Expressway Co (CYEL) with lenders too approving the proposal in-principle. The sale will resolve nearly Rs 2,500 crore of overall IL&FS debt. The company's bid at an aggregate equity valuation covers 100% debt of CYEL, official sources told TOI. IL&FS holds a 49% stake in CYEL, a company incorporated in mainland China, through its Singapore-based subsidiary ITNL International Pte, with the remaining held by Chongqing Expressway Group.
Crisis-hit IL&FS inches closer to restructuring its debt of over Rs 6,700 crore as its subsidiary IL&FS Tamil Nadu Power Company (ITPCL) has received RP4 ratings for its debt from Crisil. IL&FS spokesperson confirmed the company having received RP4 rating for ITPCL, a precursor for moving forward on the restructuring proposal involving over Rs 6,700 crore debt. Debt facilities or instruments with RP4 rating are considered to have moderate degree of safety regarding timely servicing of financial obligations.