INSUBCONTINENT EXCLUSIVE:
ILFS has a debt pile of over Rs 91,000 crore.Crisis-hit ILFS will be taken over by the government as debt defaults by the infrastructure
group have led to fears of contagion in the markets and a liquidity crisis.The National Company Law Tribunal (NCLT) on Monday ordered the
ILFS (Infrastructure Leasing and Financial Services) board suspended and allowed a government team to take control of the debt-ridden
The new board, which includes banker Uday Kotak, will meet before October 8 and submit a roadmap before the next hearing of the tribunal on
October 31.The government had said the "continuity of current board" is "prejudicial to public interest".Besides Mr Kotak, the managing
market regulator Sebi, GC Chaturvedi, the non-executive chairperson of ICICI Bank, Malini Shankar, an IAS officer, and Nand Kishore, a
senior bureaucrat from CAG (Comptroller and Auditor General).The new board has been given the liberty to unanimously elect a chairperson.The
suspended management cannot represent the company anywhere, the tribunal noted.ILFS has a debt pile of over Rs
subsidiaries that hold some of its debt pile
Its rapid fall from grace has spooked financial markets and sparked fears that its troubles could cause a crisis in the non-banking
financial services sector.The government had said last week that it is monitoring the situation of ILFS and would take appropriate action to
ensure that there is no undue impact on the financial system.Debt defaults by certain group entities of diversified ILFS have triggered
fears of liquidity crisis in the financial markets and the Reserve Bank of India has been taking steps to improve the overall cash
situation.Key ILFS shareholders include Life Insurance Corporation (LIC), State Bank of India (SBI) and Central Bank of India, with the
insurance major being the largest shareholder owning a 25.34 per cent stake.The bench set October 31 as the next date of hearing
It also directed ILFS to respond to all points raised by the government in its plea by October 15 this year.
