House panel to find out why in­fra gi­ant IL&FS col­lapsed

Hindustan Times ST (Jaipur) - - Nation - Saub­hadra Chat­terji let­ters@hin­dus­tan­times.com

STOCK CRI­SIS The lend­ing firm had ac­cu­mu­lated a whop­ping $12.6 bil­lion debt bur­den THE HOUSE PANEL’S RE­VIEW WILL CON­TINUE WHILE THE NDA GOVERN­MENT HAS OR­DERED A PROBE BY THE SFIO INTO SOME OF

THE GROUP EN­TI­TIES NEW DELHI:

: The Par­lia­ment’s stand­ing com­mit­tee on fi­nance will re­view the IL&FS case that trig­gered wide­spread panic in the In­dian stock mar­kets af­ter it de­faulted on pay­ments.

The in­fra­struc­ture lend­ing gi­ant had ac­cu­mu­lated a whop­ping $12.6 bil­lion debt bur­den af­ter a string of de­faults, prompt­ing the Cen­tre to move quickly, amid a rapid fall in the sec­tor’s stock prices, to take con­trol of In­fra­struc­ture Leas­ing & Fi­nan­cial Ser­vices Ltd. (IL&FS).

The coun­try’s big­gest pub­lic sec­tor bank, SBI, also de­cided to buy ~45,000 crore of stressed as­sets of the fal­ter­ing com­pany, pump­ing in the much-needed cash in IL&FS. “We want to as­sess the cri­sis and do our own re­view be­cause IL&FS is one of the key lenders in the in­fra­struc­ture sec­tor,” panel chair­man Veer­appa Moily told HT on Fri­day, clar­i­fy­ing the need for such a re­view by a House panel.

“We need to find out the rea­sons for its col­lapse as it has a far­reach­ing ef­fect on the econ­omy,” said Moily.

The com­mit­tee has called SEBI chief Ajay Tyagi and other se­nior of­fi­cials of the mar­ket reg­u­la­tor on Oc­to­ber 23.

“We will also go to Mum­bai in Novem­ber. Mean­while, we have also de­cided to call RBI gov­er­nor Ur­jit Pa­tel to brief us on this is­sue in Delhi,” Moily added.

A se­nior mem­ber of the panel that deals with all is­sues re­lated to the econ­omy added that the panel will also try to fix ac­count­abil­ity and sug­gest ways to pre­vent such a disas­ter in fu­ture. The fi­nance stand­ing com­mit­tee had ear­lier scru­ti­nised im­por­tant eco­nomic and fi­nan­cial bills, al­leged scams in IPL and is­sues re­lated to the GST and de­mon­eti­sa­tion.

While a panel’s rec­om­men­da­tions are not bind­ing upon the govern­ment, its re­port is al­ways con­sid­ered se­ri­ously by stake­hold­ers. The panel can also seek an ac­tion taken re­port from the govern­ment on its rec­om­men­da­tions to fol­low up on its orig­i­nal re­port.

The House panel’s re­view will con­tinue while the Na­tional Demo­cratic Al­liance govern­ment has or­dered a probe by the SFIO (Se­ri­ous Fraud In­ves­ti­ga­tion Of­fice) into some of the group en­ti­ties, amid al­le­ga­tions of fund diver­sion and mis­man­age­ment.

PTI

US Am­bas­sador to In­dia Ken­neth Juster (right) with Pa­trica Hoff­man (left), US Con­sul Gen­eral, US Con­sulate, at a puja pan­dal in Kolkata on Satur­day.

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