Even as the newly-constituted board of Infrastructure Leasing & Financial Services Ltd (IL&FS) is mulling various measures, including arrangements, compromises, divestments, restructuring of debt or equity or fresh capitalisation, to put the beleaguered company back on the rails, GN Bajpai resigned from the board of the non-banking finance company citing personal reasons.

Bajpai’s resignation comes within a month of the IL&FS board being constituted by the government.

Shareholder advisory groups, corporate governance advocacy groups, and top former regulatory officials have raised some questions about the suitability of some of the newly-appointed directors for the job.

Bajpai, who formerly headed Chairman of SEBI and Life Insurance Corporation of India, has been on the boards of Kingfisher and Dhanlaxmi Bank, both of which saw their financials slip from bad to worse.

IL&FS, in a stock exchange notice, said: “...the company has been intimated by the Ministry of Corporate Affairs, vide its letter dated October 30, 2018 that due to personal reasons, GN Bajpai, Director of IL&FS has resigned from the board of directors of the Company with effect from October 30.”

With this resignation, the IL&FS board, now has six directors — Uday Kotak, MD & CEO, Kotak Mahindra Bank; Vineet Nayyar, IAS (Retd.) and former Vice-Chairman of Tech Mahindra; GC Chaturvedi, Non-Executive Chairperson, ICICI Bank; Malini Shankar, IAS; Nand Kishore, IA&AS (Retd) ; and CS Rajan, IAS (Retd).

According to Anil Singhvi, governance expert and IiAS founder: “IL&FS is not a simple bailout candidate. It should be liquidated and its lenders should take a haircut similar to other public sector banks that are doing so for lending with closed eyes. For this, IL&FS board should have a few people with good background in the infra space to handle the crises and instil market confidence.”

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