Mumbai Congress unsure of government-appointed board in IL&FS

Blaming the BJP government for the bloodbath witnessed on the Indian stock market in the past couple of days, the Mumbai Congress on Thursday demanded a 'White Paper' on the crisis-hit Infrastructure Leasing and Financial Services (IL&FS).

"The government must issue a White Paper on how people's lives and their savings have been put at risk," city party President Sanjay Nirupam said.

Warning that the country is "hurtling towards a huge financial disaster", Nirupam said that people must know how IL&FS debt jumped by 44 per cent and its profitability declined by around 900 per cent in just three years.

"The entire stock market is crashing. This is a clear case of misgovernance by Prime Minister Narendra Modi and Finance Minister Arun Jaitley. Now, the National Highways Authority of India, a loan defaulter itself, is being roped in to buy IL&FS assets," Nirupam claimed.

He said that shares of NBFCs, which account for 17 per cent of Mutual Funds portfolios, struck an all-time low, causing massive losses to small investors. "The government has betrayed the trust of retail investors and should take concrete steps to restore investor confidence."

The Congress leader said that IL&FS owes about $500 million in repayments, but is left with around $27 million only, forcing it to put on sale its corporate headquarters this month, besides around two dozen projects.

It plans to sell these assets to reduce its debt by almost Rs 30,000 crore, but that would be barely one-third of the total outstanding amount, and the repayments of $500 million are due within the second half of the current fiscal.

As of March 2018, besides LIC, the other big-ticket stakeholders of IL& FS included Japan's Orix Corporation (23.54 per cent), Abu Dhabi Investment Authority (12.56), HDFC (9.02), Central Bank of India (7.67) and State Bank of India (6.42).

The IL&FS, which has not financed any new infrastructure project since 2015, hopes to net around Rs 1,300 crore from the sale of its headquarters in Bandra Kurla Complex.

(With inputs from agencies.)