Finance

IL&FS shuts down 45 entities suspected of round-tripping loans and funds, says report

Updated : May 21, 2019 08:47 AM IST

IL&FS also has reduced its workforce by half to 8,000 permanent and contract employees.

IL&FS, in an April 3 presentation, said it planned to close 45 firms of which 42 were registered abroad.

Debt-laden Infrastructure Leasing and Financial Services Ltd (IL&FS) closed 45 of its 347 group firms on allegations that the companies used to round-trip loans and funds, Mint reported.

Round-tripping is a form of transaction that involves selling assets to another firm while simultaneously buying back the same or similar assets around the same price.

IL&FS also has reduced its workforce by half to 8,000 permanent and contract employees, Mint said citing sources, adding that IL&FS, in an April 3 presentation said it planned to close 45 firms of which 42 were registered abroad.

The move comes amid ongoing probes of some of the directors on the IL&FS board, rating agencies and auditors by various regulatory agencies as the NBFC firm struggles under crushing debt.

IL&FS and its group companies had a debt in excess of Rs 99,000 crore as of September 2018, and its default on debt payments caused a liquidity crisis in the non-banking financial companies.

IL&FS shuts down 45 entities suspected of round-tripping loans and funds, says report

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