Mamata writes to PM to initiate probe into IL&FS crisis

Last Updated: Tue, Feb 19, 2019 11:54 hrs
A logo of IL&FS (Infrastructure Leasing and Financial Services Ltd.) is seen on a building at its headquarters in Mumbai

Kolkata: West Bengal Chief Minister Mamata Banerjee on Monday wrote to Prime Minister Narendra Modi urging him to initiate an independent probe into the IL&FS financial debacle.

In her letter, Banerjee mentioned that IL&FS faced a debt crisis to the tune of alarming Rs 91,000 crore putting at peril the hard-earned savings of lakhs of employees of the PSUs as well as private sector companies by way of uncertainty over provident and pension funds invested in the IL&FS bonds by their employers.

"These grave financial irregularities, which have continued unabated under Union government, have placed financial security of the people at even graver danger. Demonetisation and hasty and unplanned implementation of GST took away livelihood of common people. Now IL&FS financial debacle is taking away their savings," the letter said.

She also said, "I would, therefore, urge you to kindly initiate a high level impartial and independent probe into the sordid affairs of financial impropreity and possible misappropriation of the life savings of common people due to the IL&FS fiasco."

Questioning the role of credit agencies, Banerjee also alleged that they had given the highest level of credit worthiness (AAA) to IL&FS till as late as June , 2018, and in September last year, when the massive default of payment obligations became evident, these agencies sharply dropped their ratings of the beleaguered company, sparking panic among equity investors.

She said it is "surprising that the credit agencies had not lowered their credit rating over the years as the debts piled up which could not be serviced ultimately".

She also raised concern that the international financial entities such as ORIX Corpopration of Japan and Abu Dhabi Investment Authority also hold large shares in the stressed company and the debt crisis along with its default would also "tarnish our reputation among global financial institutions".

Banerjee said such a probe and its finding must lead to the punishment of those found guilty in defrauding the people.