Govt stands committed to no more defaults by IL&FS, says P P Chaudhary

'There was mismanagement in the group. It will take time to fix it. The new board needs time to resolve the situation'

As a new board looks to resolve issues in the beleaguered IL&FS, minister of state for corporate affairs P P Chaudhary tells Veena Mani and Indivjal Dhasmana that sufficient liquidity will be arranged from the financial system to ensure that no further default occurs. Edited excerpts:

How will the government ensure that the IL&FS crisis does not affect financing of infrastructure projects in the country? 
 

The government stands fully committed to ensure that the required liquidity is arranged for IL&FS from the financial system, so that there are no more defaults and infrastructure projects are implemented smoothly. There have also been serious complaints against some of the IL&FS companies for which a probe by the Serious Fraud Investigation Office (SFIO) has been ordered. 

How long will the SFIO take to submit its report? There were reports that the investigating agency does not have the required staff. 
 

No date has been fixed. But as soon as investigations are over, it will submit its report. Manpower crunch is there, but it is acting fast. We are also filling vacancies. 

Despite corrective actions on IL&FS, shares of listed companies of the group are tanking. Has the message not gone down well with the investors? 
 

There was mismanagement in the group. It will take time to fix it. The newly appointed board needs time to resolve the situation in IL&FS and its group companies. It was necessary to seek relief for some time against all legal actions for upcoming payment dues. Thus, the government approached the NCLT with a plea to grant a 90-day moratorium over the loans taken by the IL&FS and its subsidiaries. The government further approached the NCLAT on the same ground, which has now stayed all proceedings against IL&FS and its 348 group companies. 

The bankruptcy provisions have not been notified by the government. By when do you plan to bring in regulations for proprietorship firms, corporate guarantors and individuals? 
 

The working group on individual insolvency under the chairmanship of P K Malhotra is in the process of preparing draft rules and regulations for personal guarantors to corporate debtors. The government will notify the rules for personal guarantors to corporate once the group submits its report. 

Why is the government taking so much time to bring in rules for National Financial Reporting Authority (NFRA) to function? 
 

We have appointed the chairman and a member. Now we are consulting stakeholders for the technical rules for NFRA. 

Cases are mounting in the National Company Law Tribunals. How will the government de-clog NCLTs? 
 

Benches of NCLT are being established in a phased manner, keeping the workload in mind. For speedy disposal of cases, the government is recruiting members. 
 

The ministry wants to recruit at least 36 members by December. We had advertised for filling up of 22 technical posts and 14 judicial posts in the NCLTs. Apart from this, we are considering de-clogging the NCLT by reducing compounding cases by amending the Companies Act in a suitable manner.