National Company Law Tribunal allows Union government to reconstitute IL&FS

The National Company Law Tribunal on Monday allowed the Union government's interim prayer to reconstitute the Board of Infrastructure Leasing & Financial Services Ltd (IL&FS).

A Mumbai bench of judges M K Sherawat 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&FS were being conducted in a manner prejudicial to the 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.