The Supreme Court has stayed a National Company Law Appellate Tribunal order to reopen past books of Infrastructure Leasing and Financial Services and some of its group companies, but the new management at IL&FS wants the court to vacate its order, people familiar with the development told ET.
In a relief to Hari Sankaran, former managing director at IL&FS, a division bench of the top court stayed NCLAT’s order to reopen books of accounts and recast financial statements of IL&FS Ltd, IL&FS Financial Services Ltd and IL&FS Transportation Networks Ltd for five years, from 2012-13 to 2017-2018, sources said.
Sankaran, who was arrested by the Serious Fraud Investigation Office (SFIO) in connection with its probe into loan defaults of IL&FS and its group companies, had challenged the National Company Law Tribunal (NCLT) order on the ground that it was passed ex-parte, without hearing their side.
Now, IL&FS has moved the Supreme Court to vacate the order issued by a division bench of Justices Rohinton Nariman and Vineet Saran on April 29, said a person close to the development. “IL&FS’ new board wants to reopen and recast last five years accounts to know the deficiencies,” the person said.
IL&FS group has accumulated debt of over Rs 91,000 crore and defaulted on some of its commitments. Currently, its newly-appointed board is trying to sell some assets of the group and use the money to reduce debt and revive the company.
IL&FS had hired Accounting Research Found at ion, through Institute of Chartered Accountants of India, to put accountability on its ex-directors.
In December, the Ministry of Corporate Affairs (MCA) had moved the Mumbai bench of NCLT under Section 130 of the New Companies Act and sought reopening and recasting of accounts of IL&FS and some group companies for five years beginning FY13.
NCLT had allowed the petition of MCA on January 1. However, Shankaran had challenged the move in NCLAT, where the appellate tribunal had rejected his plea. Later, he moved the apex court seeking a stay on the reopening of accounts.
The ousted MD of IL&FS is also seeking a probe from independent foreign agency over local one for “fair investigation” into the affairs of the company.
