Money & Banking

New IL&FS board finds 348 entities within the group

Our Bureau Mumbai | Updated on October 04, 2018 Published on October 04, 2018

Uday Kotak, Non-Executive Chairman, IL&FS, with Vineet Nayyar, Vice-Chairman, at a media briefing in Mumbai   -  Paul Noronha

Uday Kotak says steps will be taken to preserve the company’s value

Highlighting the complexity with turning around the debt-laden IL&FS Ltd, its newly-constituted seven-member board on Thursday said that there are 348 entities within the group, significantly higher than what was disclosed earlier. This could also mean that the group’s debt could be much higher than ₹91,000 crore as at March-end 2018.

After the new board’s maiden meeting, which lasted over five hours, Uday Kotak, MD & CEO, Kotak Mahindra Bank, who was elected non-executive chairman of IL&FS, said: “The board was made aware that there are 348 entities as a part of the group, significantly larger than what we were aware of (169 entities). And this underscores the task at hand.” The Board elected Vineet Nayyar as Vice-Chairman and MD.

Market experts said the revelation about more entities in the group than what was earlier disclosed shows that some may have been flying under the radar and require thorough investigation.

Statutory panels

The board reconstituted four statutory committees under the Companies Act — nomination and remuneration committee, audit committee, shareholders relationship committee and corporate social responsibility committee.

“The board undertook an initial assessment of the ground situation and the way forward. The board’s aim is to ensure fair value and resolution of the enterprise having regard to all its complexities,” said a statement issued after the meeting.

The board will meet frequently to implement the direction of the NCLT and to prepare a roadmap. “With a view to preserving the value, the board will take necessary steps with respect to the company and its subsidiaries, joint ventures and associates. We are committed to an objective process to make a fair assessment, acting in the interests of different stakeholders to rebuild trust,” said Kotak.

When you have a situation like this, where the overall size of the debt is significant and the structure complex, then it is a challenge, explained Kotak.

On the issue of taking shareholders on board, Kotak said that shareholders are an important constituency and “we will be talking to them at an appropriate time. We have a stakeholders’ relationship committee for this.”

 

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Published on October 04, 2018
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