Business Standard

NCLAT allows 22 IL&FS group firms to service debt

- AASHISH ARYAN

The National Company Law Appellate Tribunal (NCLAT) on Monday allowed 22 companies placed under the “green” category by the new board of Infrastruc­ture Leasing & Financial Services (IL&FS) and the government to start servicing routine debt obligation­s, according to schedule.

These debt obligation­s will be done within the resolution framework under the supervisio­n of retired Supreme Court judge Justice D K Jain, a two-member Bench headed by Justice S J Mukhopadha­ya of the NCLAT said.

In a meeting that took place last month between the newly constitute­d board of the IL&FS group, its financial creditors, executives of the Ministry of Corporate Affairs, and Kotak Mahindra Bank Managing Director and Chief Executive Officer Uday Kotak — the non-executive chairman of IL&FS group — the board had classified the IL&FS group companies into three categories, namely ‘green’, ‘amber’, and ‘red’.

many as 69 out of the 169 firms of the IL&FS group incorporat­ed in India have been placed under three categories based on their ability to service routine debt obligation­s to secured financial and operationa­l creditors.

Based on the pleas of financial and other operationa­l creditors, the NCLAT on Monday admitted all applicatio­ns and agreed to hear them on March 12.

The NCLAT on Monday also asked the government to explain how it planned the resolution of the companies under the ‘amber’ and ‘red’ categories.

“We want to know from the government and the IL&FS as how they intend to resolve all entities, particular­ly in ‘amber’ and ‘red’ group entities and whether they would form a committee of creditors as is normally done in a company insolvency resolution process,” said the NCLAT.

During the hearing on Monday, Solicitor General of India Tushar Mehta appearing for the government also submitted a list of 302 subsidiari­es of the IL&FS,

which are jointly controlled entities, group companies and associates forming part of the IL&FS group companies.

Out of the 302 companies, 169 companies are incorporat­ed in India and the remaining 133 are incorporat­ed outside India and are offshore companies, he added.

Following a plea by the government, the NCLAT on Monday also lifted the interim moratorium from 133 companies of the IL&FS group incorporat­ed outside

the shores of India to allow the resolution process of these companies to continue according to the agreed framework.

On February 5, the NCLAT had asked the government to provide a list of IL&FS group companies along with their categorisa­tion based on their respective financial positions to pay their debt.

The entire resolution process would be based on the principles enunciated in the Insolvency and Bankruptcy Code, the NCLAT had then said.

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