MCA to freeze assets & bank accounts of Former Directors of IL&FS
The Ministry of Corporate Affairs (‘MCA’) shall soon move the National Company Law Tribunal (‘NCLT’) for freezing the bank accounts and properties of few of the former Directors of the IL&FS Group.
- Presently the assets of the Executive Directors have exclusively been attached by the Court.
- However, MCA is seeking extension of the attachment order to include past directors including non-executive directors as well as former auditors involved in the case.
- Once the court passes the interim order for freezing the assets of the Directors, they shall only be able to withdraw a limited portion of their sustenance.
- MCA has taken similar action against the directors of the Gitanjali Group and the directors of the companies owned by Nirav Modi and Mehul Choksi pertaining to the PNB Scam
Compliance Takeaway: Both previous and current Directors shall now be liable to the extent of their personal assets for any fraud and compliance deviation.