What Caused IL&FS Crisis?
Subsequent series of defaults caused a systemic problem with many non-banking finance companies (NBFCs) running into financial issues.
On 1 October 2018, the central government took steps to take control of Infrastructure Leasing & Financial Services Limited (IL&FS) through a directive by the National Company Law Tribunal (NCLT) and arrest the spread of the contagion to the financial markets.
A new board under the leadership of banker Uday Kotak was constituted as the earlier board was deemed to have failed in discharge of its duties.
“IL&FS was camouflaging its financial statements by hiding a severe mismatch between its cash flows and payment obligations. It was also hiding total lack of liquidity and glaring adverse financial ratios,” the petition added.
Parthasarathy, who was at the helm of IL&FS for over 25 years, is accused of masterminding one of the largest financial frauds and systematically driving a behemoth of a financial institution to…
