INSUBCONTINENT EXCLUSIVE:
Uday Kotak is the non-executive director on the board of IL-FS.New Delhi: Global markets have turned shaky ever since China's Evergrande
The real estate group is one of China's biggest developers and has total liabilities or debt of more than $300 billion
And according to veteran banker Uday Kotak, the crisis at the group is like "China's Lehman moment." The Chief Executive Officer of Kotak
Mahindra Bank also stated that the current situation at Evergrande reminded of the Infrastructure Leasing - Financial Services Limited
(IL-FS) crisis."Evergrande Seemslike China's Lehman moment
Indian Government acted swiftly
Provided calm to financial markets
The Government appointed board estimates 61% recovery at IL-FS
Evergrande bonds in China trading ~ 25 cents to a $," he tweeted.What Wrong At EvergrandeThe People's Bank of China, its central bank, and
the nation's banking watchdog had summoned Evergrande's executives in August and warned that it needed to reduce its debt risks and
prioritise stability.Regulators have warned that its $305 billion of liabilities could spark broader risks to China's financial system if
its debts are not stabilized.Evergrande is due to pay $83.5 million in interest relating to its March 2022 bond September 23
It has another $47.5 million payment due on September 29 for March 2024 notes.If Evergrande fails to settle the interest within 30 days of
the scheduled payment dates, both bonds would default
However, analysts remain divided on whether the crisis will have a domino effect or not.IL-FS crisisIL-FS was floated by
government-controlled entities, including the Central Bank of India, Unit Trust of India and the Housing Development Finance Corp in the
Mr Kotak was appointed by the Centre as the head of the IL-FS board which will help it come out of difficulties
He is the non-executive director on the board of IL-FS
The government superseded the old board.After that, it was discovered that there was a complex web of over 250 companies which were part of
the group, with an outstanding of over Rs 94,000 crore to lenders.Lehman CrisisStock market crashed and millions lost their jobs when Lehman
Brothers ran into bankruptcy in 2008, forcing US authorities to shut it down
Lehman Brothers, a global financial services firm, was one of the leading companies on Wall Street
The shut down was majorly due to sub-prime mortgage crisis at the firm.
