IL&FS Legal Battle: Unraveling Financial Irregularities in a Corporate Giant

IL&FS Group is pursuing legal action against former directors to reclaim excess managerial compensation amidst a financial scandal. The group aims to recover Rs 187 crore and has resolved significant debt through asset monetization. New leadership and legal frameworks are addressing past financial mismanagement and fraud.

The IL&FS Group is seeking legal advice as it considers action against former directors and subsidiaries who have resisted returning excess remuneration. This move, detailed in an affidavit, comes as the debt-ridden company attempts to recover Rs 187 crore paid during a tenure marred by financial irregularities.

Financial records between 2013–2018, recast by order of the National Company Law Tribunal, revealed a stark discrepancy: a reported profit contrasted with actual losses of Rs 9,600 crore. The government had intervened, amidst sectoral alarm, replacing the previous board overseeing this concerning fiscal engineering.

As part of its debt resolution strategy, IL&FS has separated its entities into 'green,' 'amber,' and 'red' categories based on financial health, aiming to manage a formidable debt burden. These measures include the culmination of Rs 38,082 crore in debt repayments, contributing to an overall expected resolution of Rs 61,000 crore from Rs 99,355 crore total debt.

(With inputs from agencies.)