IL&FS Infrastructure Debt Crisis

Infrastructure Leasing and Financial Services (IL&FS) is an Indian state-funded infrastructure development and finance company created by public sector banks and insurance companies. It operated through a complex web of hundreds of subsidiaries and special purpose vehicles, financing major national infrastructure projects such as tunnels and highways. Over time, the organization expanded its operations and took on substantial debt through various group entities.

Between July and September 2018, defaults began to surface as several IL&FS subsidiaries struggled to repay loans, short-term deposits, and commercial papers to lenders like SIDBI. Reports indicated procedural lapses, lavish salaries taken by top management, and loans granted to non-credit-worthy entities. These failures triggered widespread concern across financial markets and led to regulatory scrutiny.

In response to the crisis, the Government of India intervened in October 2018 by superseding the existing board and appointing a new leadership team to stabilize the company. The Serious Fraud Investigation Office (SFIO) launched a probe into the affair, leading to the arrest of a former vice-chairman in Mumbai for alleged fraud and wrongful loss. Investigations also scrutinized the role of auditors in the matter, while resolution efforts continued to address the group's massive debt.

Not yet reported: The exact total financial debt figure prior to government intervention is not fully consolidated in the provided text.