In a setback for the previous management of Infrastructure Leasing and Financial Services (IL&FS), the Supreme Court on Tuesday allowed reopening of books of accounts of the last five years.
In May, the apex court had stayed a National Company Law Appellate Tribunal (NCLAT) order to reopen the past books of IL&FS and its group companies.
SC vacating the stay now comes as a setback for Hari Sankaran, former managing director of IL&FS, who had challenged the NCLT order saying it was passed ex-parte, without taking into consideration their version.
The court has allowed to reopen the books of IL&FS, IFIN, ITNL.
After the stay on the NCLAT order, the new management of IL&FS had moved SC, requesting it to vacate the stay and allow the reopening of books.
Launching a massive crackdown on perpetrators of the IL&FS scam, the Serious Fraud Investigation Office (SFIO) has charged the erstwhile top management members of the group's financial services subsidiary IFIN of forming a "coterie" with its auditors and independent directors to defraud the company while running the business as their "personal fiefdom".
Officials also said it is just a tip of the iceberg in this massive fraud case, involving defaults totalling an estimated amount of over Rs 90,000 crore.
The huge scam came to light last year after IL&FS and its subsidiaries defaulted on several debt repayments due to a severe liquidity crisis. As of March 2018, it owed over Rs 90,000 crore to banks and other creditors. The government in October last year superseded the board of IL&FS and appointed a new board, with eminent banker Uday Kotak as its executive chairman.
(Inputs from PTI)