NCLAT Questions IL&FS for Using Pension and Provident Funds of Employees for Investment Purposes



NCLAT Questions IL&FS for Using Pension and Provident Funds of Employees for Investment Purposes

New Delhi: On Monday, April 8, the National Company Law Appellate Tribunal directed the debt-struck Infrastructure Leasing & Financial Services Limited (IL&FS) to furnish information pertaining investment made by pension and provident funds in its group firms and further sought details of the financial liabilities of those entities.

The matter was heard before a two-member bench of the Appellate Tribunal headed by Justice S J Mukhopadhaya, who observed that the money invested by the pension fund, and provident fund in the IL&FS companies should be released first.

"Provident fund and pension fund have nothing to do with this, this is not your money, it is related to the employees. We want that it should be released first,” stated the bench

The IL&FS had previously proposed a new repayment structure before the Courts which included categorizing group entities into three categories Green being firms that can meet all debt obligations, Amber being firms that can meet certain debt obligations and Red being firms that do not meet any debt obligations. This proposition for a newly structured repayment structure was accepted by the NCLAT.

The four entities under scrutiny are the ‘Amber’ firms, which include Hazaribagh Ranchi Expressway, Jharkhand Road Project Implementation Company, Moradabad Bareilly Expressway and West Gujarat Expressway.

During the hearing, the Appellate Tribunal in the meanwhile has permitted the IL&FS and its group entities to carry out the resolution process.

Previously, on March 28, the National Company Law Appellate Tribunal (NCLAT) had directed the infrastructure Leasing & Financial Services Limited (IL&FS) to furnish details of dues of 13 of its group companies alongside the dues of the creditors, in order to facilitate the release of outstanding payments to lenders.

Although, at present, the NCLAT directed 4 out of 13 ‘Amber’ entities to prepare charts. The remaining 9 firms are also scheduled to prepare charts by the next date of hearing, which is April 16.

 

 

 

Infrastructure Leasing and Financial Services (IL&FS)
National Company Law Appellant Tribunal (NCLAT)

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