June 17, 2019

Ministry of Corporate Affairs Set To Seek Court Order to Freeze Bank Accounts, Properties of Former IL&FS Directors

[ By Bobby Anthony ]


The Ministry of Corporate Affairs (MCA) plans to move court to freeze bank accounts and properties of past IL&FS group directors as well as move the National Company Law Tribunal (NCLT) to widen the probe.

The MCA is likely to request the court to extend its earlier probe orders to cover former auditors as well as non-executive board members.

If and when the court passes an interim order freezing the assets of the accused, only limited withdrawal of funds will be allowed for their sustenance.

Meanwhile, the Income Tax Department which had initially probed IL&FS Rail, which is an IL&FS group company, plans to probe allegations of shell companies floated, allegedly to award contracts as well as divert funds.

According to an Enforcement Directorate complaint about IL&FS Rail, transactions with private firms like Silverpoint Infratech, Suryamukhi Projects, NKG Infrastructure, Ethical Constructions, Prathyusha Resources & Infrastructure were found to be bogus.

And Income Tax probe into the case of Silverpoint revealed that it was involved in the business of providing accommodation entries to earn a commission of 0.5%.

After the bids for the domestic road vertical of IL&FS group IL&FS Transportation Networks India Ltd (ITNL) were delayed, this too would mandate a probe into the books of ITNL, besides other special purpose vehicles floated to construct infrastructure projects.

Presently, the Serious Fraud Investigation Office (SFIO) is in the process of working on a charge sheet on ITNL.

An investigation into the affairs of ITNL and other special purpose vehicles is likely to probe whether there were any fake invoices made, the role of auditors as well as the nature of documentation involved.

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