The board is expected to submit a preliminary report by October 8 and a comprehensive resolution plan in two weeks
The new board of debt-ridden Infrastructure Leasing & Financial Services (IL&FS) constituted by the government will meet on October 4 in Mumbai to discuss the way ahead for the company. Here's what to expect:
—The newly-appointed board, led by Uday Kotak, is expected to chalk out a resolution plan and submit its first take within 15 days. They will ascertain the magnitude of the crisis and recommend possible solutions to balance the ‘huge mismatch’ and misrepresentation of facts by the company.
While a comprehensive report will take a fortnight, a preliminary report will be submitted before October 8, when the case is due at the National Companies Law Tribunal (NCLT).
—On October 3, the government appointed a seventh member to the board: CS Rajan, former Chief Secretary of Rajasthan. During this meeting, the board will also assess whether there is need to induct more members.
—The new board may pursue the resolution plans that the old board was unable to carry out. Asset sales and fundraising through equity and debt are possible routes the board may take to help revive the company, The Economic Times reports.
The ousted board was unable to raise funds through these avenues, but the new one might be successful as it has the government’s backing.
—The board will discuss short term steps that can be taken to reinstate faith in the company. IL&FS cannot default on any upcoming repayment obligations, which will help ease the nervous markets. During the meeting, the directors will also discuss whether the company can expand or take new business orders, Mint reports.
—The government’s sole focus at the moment is to restore confidence in the IL&FS group. While it is quick to point out that this is not a witch hunt, those responsible for the deterioration of the company will pay the price. The priority of the board is to stabilise operations at the company.The Centre’s counsel told NCLT that IL&FS directors failed to discharge their duties and that the company conveyed a rosy picture of its balance sheet. An investigation by the Serious Fraud Investigation Office (SFIO) in the firm's operations is ongoing.The Great Diwali Discount!
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