'Few banks have't released funds to IL&FS firms despite NCLAT orders'

The Ministry of Corporate Affairs has told the National Company Law Appellate Tribunal (NCLAT) that a few lenders of the IL&FS Group and its group companies have not released payments to meet the "going concern" status of the companies, which is against the tribunal's directive for release of payments in such matters.

The ministry's affidavit noted that in the order dated October 15, 2018, the NCLAT had directed that creditors shall not set off or possess any amount lying with them in account of an IL&FS Group entity against any dues, whether principal or interest.

On February 11 too, the bench had ordered the lenders to the release "any amount payable" to the the group companies.

However, despite repeated orders, the IL&FS "continues to face some difficulties" from Allahabad Bank which is refusing to release going concern payments in respect of Road Infrastructure Development Company of Rajasthan Ltd (RIDCOR), a group company.

Particularly, while the Allahabad Bank had previously released "going concern payments in respect of RIDCOR of some invoices pertaining to months of October 2018 till February 2019 aggregating to Rs 98.23 lakh crore, some invoices aggregating to Rs 52.51 lakh have not been released," it said.

The ministry affidavit observed that if creditors continue to hold back payments, it will be difficult for the companies to maintain the "going concern" status and may impact the resolution process.

Further, according to the affidavit, two more companies have entered the "red" list of the IL&FS group firms, increasing the number of entities that cannot meet their payment obligations, not even to the secured financial creditors, to 82.

According to the affidavit filed in the NCLAT by the ministry, the total number of "red" companies is now 82, against the initial number of 80 firms.

The list of "green" companies also has increased by five to 55 firms, it said.

Companies that are able to pay all payment obligations are "green", the companies only able to meet operational payments and senior secured debt obligations are "amber" and those that are unable to meet obligations to even senior secured financial creditors are categorised as "red".

The new companies in the "red" category are the Jharkhand Infrastructure Development Corporation Ltd and the Orissa Project Development Company Ltd. Companies newly classified under the "green" category are the Gujarat International Finance Tec-City Company Ltd, Managalore SEZ Ltd, New Tirupur Area Development Corporation, ONGC Tripura Power Company and Canopy Housing & Infrastructure.

On Tuesday, the NCLAT adjourned the matter till May 29.

After the fresh categorisation, the NCLAT asked the government to file an affidavit detailing the present financial status of the companies and if their categorisation can be changed among "green", "amber" and "red" categories.

--IANS

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