Infrastructure Leasing & Financial Services

ARE THE FINANCIAL STATEMENTS SHOWN BY THE COMPANIES ARE ACTUAL OR IS WINDOW DRESSING?

The Indian economy has been a victim of rampant window dressing by corporates, which was done by the promoters/management and all others supported it knowingly, whether it be auditors, independent directors, rating agencies and others.  It was systematic collusion that perpetrated the giant manipulation for years.

WHAT IS WINDOW DRESSING?

It means to deliberately manipulate the financial statements and reports in order to show a rosy picture of performance, profitability and financial position. It is the fudging of facts, to show a better or exaggerated performance/position and to show an improved and favourable financial position.

SOME OF THE MAJOR EXAMPLES OF FRAUD UNDER WINDOW DRESSING ARE-

1. Satyam scam
2. Punjab Maharashtra Cooperative bank scam(PMC)
3. Dewan Housing Finance limited scam(DHFL)

THE MAJOR ONE

THE INFRASTRUCTURE LEASING AND FINANCIAL SERVICES 

(IL&FS)SCAM

IL&FS defaulted on a few payments and failed to service its commercial papers (CP) on due date which means the company has run out of cash or it is facing a liquidity crunch.

The company piled up too much debt to be paid back in the short-term while revenues from its assets are skewed towards the longer term.IL&FS first shocked markets when it postponed a $350 million bonds issuance in March due to demand for a higher yield from investors.

The recent slowdown in infrastructure projects and disputes over contracts locking about Rs 90 billion of payments due from the government have further worsened the condition.

THE WORST EFFECTS OF CRISIS-

The company's default spells trouble for its investors, which include banks, insurance companies, and mutual funds. Investors and traders have been worried over the cascading effects of IL&FS’s defaults.

IL&FS sits atop a web of 169 subsidiaries, associates, and joint-venture companies, which makes the default even more worrisome.The debt crisis in IL&FS has adversely impacted growth of the NBFC sector in India and might lead to its consolidation, said a report by Fitch Ratings on shadow banking.

THE MISSING ETHICS-:

1. He subjugated managers, fooled generations of lenders, bullied journalists and made directors dance to his tune.
2. The greatest mystery is why RBI never stopped IL&FS from borrowing even after knowing that the group’s non-banking financial company (NBFC) I-Fin was breaking all the rules. Was there a handful of very senior RBI officials who gave IL&FS a long rope?
3. The problem is in the peculiar nature of IL&FS. First, as earlier pointed out, it is supposed to be a private company, which acts like a quasi-government arm because it lends to the infrastructure sector and has a lot of big government companies and banks as shareholders.
4. More importantly, it is both a lending institution as well as an execution company. It has bid, won and taken on projects under various subsidiaries, and which in turn have raised debt financing both from the parent as well as from the market.
5. And it had a management team, which successfully hid the rising crisis and tried to bury it under the carpet until it could no longer do so. In fact, Ravi Parathasarathy who created it and led it for three decades, resigned suddenly a few months before the defaults by both the parent and its subsidiaries started. 

At the end I just wanted say that don't be a fool

If you're investing in any of the companies make a total research 

Save your money from all of these false promises 👍

https://www.ilfsindia.com/