3 April 2019: In a major development in the IL&FS crisis, the government has of late paid up on sovereign guarantees to Asian Development Bank (ADB) and KfW, a state-run bank of Germany, people in the know of the developments said.
Payment of around $2 million or Rs 13.84 crore has been made to ADB at the least in the last couple of months and around Rs 5 crore has been paid to KfW, sources said.
Significantly, the payment has not been disclosed at the National Company Law Appellate Tribunal (NCLAT) even though the appellate tribunal has asked both the government and the IL&FS board to take its approval before any step regarding the cash strapped group.
It has come to light that in 2009, the government of India had issued a sovereign guarantee on behalf of Infrastructure Leasing & Financial Services (IL&FS).
The Finance Ministry declined to comment on the IL&FS related queries while ADB did not respond to information sought by IANS. IL&FS also declined to comment on the matter.
In the legal developments, the NCLAT on March 29 told the board of the cash-strapped IL&FS to submit details of the group’s dues. The matter would be next heard on April 8.
The Delhi-based appellate tribunal also said that there would be no stay on the government’s resolution plan for the companies of IL&FS. However, all steps regarding the resolution of the group companies would have to be cleared by the appellate tribunal, it added.
The crisis in the infrastructure lending company came to light when it defaulted on its commercial papers in Septemeber in 2018.
Last year, the central government superseded the management of the beleaguered company through a National Company Law Tribunal (NCLT) order and appointed a six-member board led by Uday Kotak, MD and CEO of Kotak Mahindra Bank, to restore its financial solvency.
Key public sector lenders and undertakings, such as the Life Insurance Corporation of India (LIC) and the State Bank of India (SBI), have a 25.34 per cent and 6.42 per cent stake, respectively, in the firm which has around Rs 91,000 crore in long-term debt.