Tribune News Service
New Delhi, April 27

The Army looks to retrieve its ‘sacred funds’, meant for pension of widows and retired soldiers, which the Army Group Insurance Fund (AGIF) had invested in Infrastructure Leasing & Financial Services (IL&FS) — a company that has gone from a top-rated fiscal institution to one that is now under a serious financial crisis.

The National Company Law Appellate Tribunal (NCLAT), which is hearing petitions with respect to the IL&FS resolution, has been apprised of the AGIF funds. The Army authorities said, “It is a ‘sacred fund’ meant for making payments to soldiers and widows” and the NCLAT has been requested to accord highest priority for this.

Investment in IL&FS was “made on a sound financial logic” by the AGIF and these were done when the company enjoyed ‘AAA’ rating. The company collapsed gradually over the past 12 months. “The AGIF is in a fine state to meet all existing obligations,” Army sources said.

There is a signal from the NCLAT to ensure that investments by pension and PF trusts is not lost in any resolution plan for IL&FS and these get priority even when the repayment starts. Under the resolution plan, the government has categorised IL&FS group companies into various categories based on their financial positions.

More than 50 retirement funds covering over 15 lakh employees have exposure to IL&FS. The PF trusts of state electricity boards, public sector undertakings and banks are among them.