Infrastructure Leasing & Financial Services Ltd (IL&FS) plunged deeper into a crisis on Friday as Ramesh Bawa, the Chief Executive Officer and Managing Director of the company, put in his papers.

This comes amid worries over massive defaults by the cash-strapped company in its loan repayment commitments.

Moody’s Investor Services on Thursday had said that rising liquidity worries at ailing IL&FS are credit negative for banks and debt market. This observation comes in the backdrop of IL&FS’ subsidiary IL&FS Financial Services being barred from accessing the commercial paper market due to delay in repayment of some of its obligations and IL&FS itself defaulting on a repayment of ₹1,000 crore to the Small Industries Development Bank of India.

This is the second major change at the top for IL&FS in the last few months. The initial signals that all was not well with the infrastructure company came in July, when Hemant Bhargava, LIC Managing Director and its nominee on IL&FS’ board, took over as the non-executive chairman of IL&FS. LIC and SBI are the largest shareholders in the company.

The then IL&FS chairman Ravi Parthasarathy had resigned on health grounds. Earlier this month, former LIC chairman SB Mathur was appointed as its new non-executive Chairman, replacing Hemant Bhargava.

While IL&FS did not issue any statement explaining the circumstances of Bawa’s exit, industry sources said this could be a precursor to an intervention by the Central government.

Two board meetings held by the company failed to arrive at a consensus on the way forward. While the initial proposal was to ask LIC and SBI to pump in fresh funding of nearly ₹3,000 crore, this was not agreed to as most stakeholders wanted a strategy on how IL&FS would repay its debt.

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