NCLAT asks IL&FS, govt about steps taken for 55 loss making red firmsPTI | New Delhi | Updated: 12-07-2019 21:34 IST | Created: 12-07-2019 21:34 IST
The National Company Law Appellate Tribunal has asked from the government and IL&FS about the steps being taken for the 55 loss making red entities of the debt-ridden group. A two-member NCLAT bench headed by Chairman Justice S J Mukhopadhaya has asked IL&FS and the Ministry of Corporate Affairs to file an affidavit within two weeks stating the time it would take to decide on it.
The appellate tribunal has also asked as whether any such red entities could be categorised into green or amber list of IL&FS companies. Meanwhile, during the course of hearing, IL&FS informed that three amber listed companies would be upgraded to green entities as they have signed term sheet with their lenders for restructuring of their debts etc.
"No specific statement has been made in regard to one or other red entity. The ILFS and Union of India are allowed two weeks time to state as to what action they intend to take with regard to 55 red Entities and the time frame and specifically state as to whether any one or more Red Entities can be turned as 'amber entity' or 'green entity'," the NCLAT said. It also said: "If it is not possible, they will inform the steps required to be taken for the other Red Entities".
Besides, the appellate tribunal also asked IL&FS about the steps taken by them for releasing the amount of various pension and provident funds invested in the red companies of the group. "In the said affidavit, the ILFS and Union of India will specifically state as to what steps they will take to release the amount payable towards 'Pension Fund'; 'Provident Fund'; 'Army Group Insurance Fund'; 'Gratuity Fund'; 'Superannuation Fund'; 'Postal Life Insurance Fund'; etc, if invested in one or other 'Red Entity'," the tribunal said.
The NCLAT also made it clear that if fund is generated by the red listed companies, then it may direct them to release the amount to these pension and provident funds. After three entities -- Jharkhand Road Projects Implementation Company, West Gujarat Expressway and Moradabad Bareilly Expressway -- turning green, nine companies would remain in the amber list.
The NCLAT has directed to list the matter on August 8 for the next hearing. As per the roadmap for IL&FS, which has a total debt of over Rs 90,000 crore, its group companies have been categorised into three categories -- Green, Amber and Red -- based on their respective financial positions.
Companies under the green category will be those that continue to meet their payment obligations. Amber category is for those companies that would not be able to meet their obligations but can meet only operational payment obligations to senior secured financial creditors.
Amber category entities "are permitted to make only payments necessary to maintain and preserve the going concern". "Companies falling in the red category are the entities which can not meet their payment obligations towards even senior secured financial creditors," as per the plan.
Such companies will be permitted to make payment necessary to maintain and preserve. The entire resolution process is based on the principles enunciated in the Insolvency and Bankruptcy Code.