Government ropes in Kotak Mahindra bank boss Uday Kotak to head IL&FS

The government has roped in Kotak Mahindra bank boss Uday Kotak to head IL&FS. The IL&FS owes Rs 55000-Rs 60000 crore to banks. The Ministry of Corporate Affairs has approached NCLT with the request to supersede ILFS board. The decision is likely to be announced in the evening.

This comes after the Centre moved National Company Law Tribunal (NCLT) on Monday, seeking to appoint 10-member board led by veteran banker Uday Kotak. The government has moved National Company Law Tribunal (NCLT) for change of management at the crisis-hit IL&FS, according to a senior official.

Debt defaults by certain group entities of diversified IL&FS have triggered fears of the liquidity crisis in the financial markets and the RBI has been taking steps to improve the overall cash situation.

The corporate affairs ministry has applied to the tribunal, the official said Monday.

Sources close to IL&FS said it is likely to support the application as it will help resolve all the pending issues and reach at a comprehensive solution for the benefit of all stakeholders.

The key shareholders of IL&FS include LIC, SBI and Central Bank of India. IL&FS, where LIC is the largest shareholder with 25.34 per cent stake, has a debt burden of over Rs 90,000 crore.

Earlier on Sunday, Congress president Rahul Gandhi launched a scathing attack on Prime Minister Narendra Modi, alleging that the latter was bailing out the debt-ridden Infrastructure Leasing and Financial Services (IL&FS) using funds from the State Bank of India (SBI) and Life Insurance Company (LIC).

"Modi Ji, your favourite private company, ILFS is about to sink. You want to save it by using LIC money. Why? LIC is a symbol of trust in the country. People save every penny to buy an LIC policy. Why do you want to protect the fraudsters with their money? Does ILFS mean 'I Love Financial Scams' for you?" he tweeted.