The government-appointed board of Infrastructure Leasing and Financial Services (IL&FS) Group has reduced its workforce by 45% in the last seven months, it has been reported.
An IL&FS spokesperson told Live Mint that IL&FS Group had nearly 5,000 permanent employees and another 9,000 contractual staff. “Half of them have gone. The permanent staff strength has come down to 2,500. In the contractual staff, wherever there are ongoing works such as roads, some are there and some have gone. The total strength including contractual stuff has come down to 8,000,” Live Mint quoted a person associated with IL&FS as saying.
While the new board is currently working towards a resolution process for the group companies since October, it has also taken up initiatives towards “rationalised manpower with a view to reduce costs associated therewith”. The initiatives will include “salary rationalization of employees”, “separation of superannuated consultants”, “discontinuation of business/vertical”, “talent structuring”, “amalgamation of roles and responsibilities”, and “identification of group companies towards closure”. These steps are planned to be taken up in two phases.
The spokesperson told Live Mint: “Phase I will contemplate initiatives like salary rationalization of employees, separation of superannuated consultants, which have been executed. The said steps are likely to yield net savings of approximately Rs 100 crore annually. Phase II initiatives including talent restructuring, amalgamation of roles and responsibilities are under process. These steps will yield an approx 50% savings in the wage bill of the IL&FS Group. Several other initiatives are being initiated and that will bring down total manpower of the IL&FS Group by approximately 65% and wage cost by 50% respectively.”
These figures indicate the significant impact of the downfall of IL&FS at the cost of multiple frauds by several managerial members.
In April, the new board had announced that at least 45 subsidiaries of IL&FS (of 347 total subsidiaries) are either closed or struck off or divested or liquidated, the spokesperson had confirmed that these companies are now shuttered, as they were essentially operated for the sake of round-tripping loans and funds, one of the potential financial frauds committed by the IL&FS. Forty-two of these companies are claimed to be overseas entities.
As of September 2018, IL&FS group companies had an outstanding debt of over Rs 99,000 crore.
This month, Grant Thornton submitted the final forensic audit of IL&FS financial transactions. Among the anomalies raised by the audit include 107 instances of loan evergreening- loans given without proper collateral in the range of over Rs 10,264 crore. Also, Thornton found at least 10 types of possible fraud by one entity, IL&FS Financial Services Ltd (IFIN), involving a massive Rs 13,299 crore.
Reportedly, the Serious Fraud Investigation Office (SFIO) and a private investigator to be hired by IL&FS board are likely to conduct two separate digital forensic investigations – data trail of entities servers, desktops, laptops, tablets and mobile phones of senior company executives for evidence of any wrongdoing of fraud.
Also read: Forensic Audit Unearths Loopholes in IL&FS Books: Report