Government takes control of IL&FS, forms 6-member board led by Uday Kotak

Mumbai, Oct 1: The government on Monday took control of the debt-laden Infrastructure Leasing and Financial Services (IL&FS), whose recent defaults have roiled the markets.

A Mumbai bench of judges M K Shrawat and Ravikumar Duraisamy approved the takeover of IL&FS board by government nominees, saying the mismanagement at the crisis-ridden IL&FS made the present case a fit one for invoking Article 241 (2) of the Companies Act-2013, that provides for the suppression of the existing board.

The bench said going by the Centre's petition, it was apparent that the "affairs of IL and FS were being conducted in a manner prejudicial to public interest".
It, thus, approved the Centre's proposal to let a six- member team take over the IL&FS board.

These six members are - Uday Kotak of the Kotak Mahindra Bank, retired IAS officer Vineet Nayyar, former SEBI chairperson G N Bajpai, ICICI's non-executive chairperson G C Chaturvedi, IAS officer Malini Shankar and senior bureaucrat from CAG Nand Kishore.

The new board members have been given the liberty by the bench to unanimously elect a chairperson from among themselves.

The new board has been directed to hold its first meeting on October 8 this year, and to submit a report on its finding and a roadmap before the bench by October 31, the next date of hearing.

The bench also issued a notice to IL&FS, directing it to respond to all points raised by the Union government in its plea by October 15 this year.

OneIndia News (with PTI inputs)