A massive sum of Rs182 crore has been paid out in legal, consulting and audit fees to the team working on the resolution of the giant Infrastructure Leasing & Financial Services (IL&FS). Importantly, they are the only ones who have got paid in the past 3.5 years (other than employees and directors who get their salaries, sitting fees, expenses and increments) after a new board was put in place to ‘resolve’ this gigantic mess of 347-odd entities with deep inter-linkages.
This information is not in the public domain and was shared with me only after I pointed out that a government-appointed board, engaged in a clean-up, cannot get away with a ‘decline to comment’ stance. I was still not given a break-up of the fees paid to the two law firms and four expensive consultants engaged by IL&FS.
On the face of it, IL&FS submits regular ‘Progress Reports’ to the National Company Law Tribunal (NCLT) under the supervision of a retired judge; but this does not require it to provide all the information that any set of listed companies would need to put out. No annual report or balance sheet is available for three years, since ‘the accounts are being recast’, I was told. So, creditors have no information beyond submissions to the NCLT.
This is not to say that the government-appointed board is not doing a sincere job—it probably is. But, until the resolution gets past the never-ending, multi-level litigation and actually makes payments to deserving creditors, the…
