NCLAT against giving NPA tag to IL&FS accounts, for now
26 Feb 2019
The National Company Law Appellate Tribunal (NCLAT) has directed banks and other financial institutions not to declare the accounts of debt-ridden Infrastructure Leasing and Finance Services (IL&FS) and its group companies as non-performing assets without its permission.
A two-member NCLAT bench, headed by chairman Justice S J Mukhopadhaya, on Monday said any move to declare the accounts of the group would only hamper IL&FS debt resolution.
“No IL&FS or its subsidiaries’ account to be declared an NPA by any financial institution without approval from the NCLAT,” the appellate tribunal said.
The tribunal’s direction came during the hearing over the government’s plan for the resolution of IL&FS group companies.
During the last hearing on 11 February , the NCLAT had allowed 22 companies belonging to the IL&FS group that are in sound financial health to service their debt irrespective of the group’s debt woes.
IL&FS has categorised group entities into three — Green (firms that can meet all debt obligations), Amber (firms that can meet some debt obligations), and Red (firms that can’t meet any debt obligations), while proposing a new repayment structure to the courts.
NCLAT also gave IL&FS the go-ahead to proceed with this repayment structure.
According to the plan, 22 domestic subsidiaries have been classified as “Green” as they could service all their financial and operational debt, as per their repayment schedule; 10 companies have been classified as “Amber” as they can service only their operational debt obligations and payment to senior secured financial creditors while 38 others have been marked “Red” as they cannot meet any of their payment obligations, even those to senior secured financial creditors.
The appellate tribunal also lifted moratorium and allowed 133 IL&FS firms incorporated outside India to continue with the resolution process.
Ethiopia frees 4 Indian IL&FS staff
Ethiopia on Saturday released four Indian employees of IL&FS after holding them captive by Ethiopian employees of ITNL-Elsamex JV Bure, an IL&FS subsidiary, over salary dues.
The four have reached India after their three-month-long captivity ended on Saturday night.
“IL&FS Transportation Network Ltd (ITNL), a part of the IL&FS Group, confirms that it has been able to secure the safe return of its four employees, working on projects in Ethiopia, to India,” IL&FS said in a statement.
The employees released from captivity included Sukhvinder Singh, Bishnu Nagaraju, Chaitanya Hari and Khurram Imam.
“The company takes this opportunity to thank all the agencies including the Ministry of External Affairs (MEA), Indian Embassy in Addis Ababa and other authorities and regulators — in India and Ethiopia — for their tireless efforts towards facilitating the safe return of its employees from Ethiopia,” it added.