15 members of IL&FS board sacked by govt
The government dissolved the 15-member board of debt-ridden Infrastructure Leasing & Financial Services (IL&FS) in a move to revamp investor confidence scalded by the firm’s defaults and fears of a credit freeze.
The board was replaced with a new six-member panel headed by Managing Director of Kotak Mahindra Bank Uday Kotak. He will be joined by ICICI chairman GC Chaturvedi, former vice-chairman of Tech Mahindra Vineet Nayyar, former Sebi chairman GN Bajpai and bureaucrats Malini Shankar and Nand Kishore.
The central government’s petition before the National Company Law Tribunal (NCLT) was accepted by the court on Monday afternoon and the new board will meet on or before October 8. The government argued that IL&FS’ existing board be suspended after a series of defaults by the company led to meltdown of confidence in financial markets. Shares of non-banking financial services companies fell sharply in September on worries that the contagion from IL&FS will spread to the rest of the banking sector.