Mumbai: The Mumbai bench of the National Company Law Tribunal (NCLT) on Monday allowed the government’s interim plea to restrain nine erstwhile top officials of Infrastructure Leasing and Financial Services Ltd (IL&FS) from disposing of their personal assets.

NCLT directed Ravi Parthasarathy, A.K. Saha, Hari Sankaran, G. Ramachandran, R.C. Bawa, S. Rengarajan, Mukund Sapre, Pradeep Puri, and Vibhav Kapoor to disclose their assets in an affidavit.

“We are relying upon the interim investigation report of the SFIO and directing respondents," said the NCLT bench. “The respondents are restrained from mortgaging, alienating, selling or creating any third party rights on their movable or immovable assets, which are fully or partly owned by the respondents."

NCLT also allowed all the erstwhile board members mentioned in SFIO’s interim report to file their response in three weeks and gave the ministry of corporate affairs (MCA) two weeks to file its response. The tribunal will hear the matter further on 16 January.

On Monday, before the tribunal’s ruling, Sanjay Shorey, director, legal prosecution, MCA, argued that these nine people collectively took all the key decisions of the company.

“The accounts of the holding company were coloured and decorated at the cost of public sector banks’ money," argued Shorey. “IL&FS Ltd and IL&FS Financial Services Ltd (IFIN) kept raising funds on the basis of bogus and fictitious but good credit ratings and this short-term loans were passed to subsidiaries, joint ventures and special purpose vehicles to help service their debts," he said.

The tribunal allowed the government to add in its petition six former top officials of IL&FS and its subsidiaries as parties based on an interim report filed by SFIO.

Fredun De Vitre, senior counsel appearing for Sankaran, argued that the allegations made against the former vice chairman of IL&FS are mere generalised statements without any specific details of any wrongdoing.

Sankaran had not gained a single rupee from any transaction and also just a week before the new board had taken over the old board had also asked for a similar moratorium and it had similar plans to sell the company’s assets, said Di Vitre. Sankaran has devoted an entire career to the company, he said, adding that his client has already given details in an affidavit about his movable and immovable assets and is willing to give that again as well and they are cooperating with the new board as well.

However, the allegations made by the government department are clearly without any substance, De Vitre said.

Senior counsel Vikram Nankani, appearing for K. Ramachandran, said that he is impeded in the matter on Monday without giving him an opportunity to put his stand, passing any order against him would be a breach of natural justice.

The government also added 301 subsidiaries of IL&FS as parties to the case as against an earlier tribunal direction to add 348 subsidiaries. The government informed NCLT that the remaining subsidiaries, mostly foreign firms are now not in existence.

In October, NCLT had replaced the earlier board of IL&FS by Uday Kotak-led board. It had also initiated a probe into the financials of the company by the government body.

The government also informed the tribunal of the proposed stake sale of IL&FS in two of its clearing corporations. IL&FS has accumulated a debt of more than 91,000 crore and has defaulted on some of its commitments.

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