IL&FS Seeks Legal Action to Recover Overpaid Director Fees

5 Nov 2024 , 03:24 PM

According to the most recent affidavit filed by the indebted company with the NCLAT, IL&FS Group is seeking legal advice on the best course of action against its former directors and two step-down units, who have refused to reimburse the excess managerial compensation that was paid to them.

Over Rs 187 crore is being recouped by IL&FS from the directors and independent directors of the previous board, whose members used financial engineering to make the business and its two subsidiaries, IFIN and ITNL, appear to be profitable even though they were actually losing money.

A loss of about Rs 9,600 crore was discovered when the books of accounts and financial statements of IL&FS, IFIN, and ITNL were recast earlier this year in accordance with the National Company Law Tribunal’s (NCLT) directives for the five years, from FY 2013–14 to FY 2017–18.

The former board and management of the company first reported a profit of Rs 1,869 crore, which the government eventually overturned when irregularities were discovered that rocked India’s banking industry.

The Ministry of Corporate Affairs (MCA) received the audited reopened books of accounts and re-casted financial statements for IL&FS, IFIN, and ITNL on July 31, 2023, June 26, 2023, and April 3, 2023. On June 28, 2024, NCLT also recorded the audited re-casted financial statements.

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