Money & Banking

Uday Kotak gets a year’s extension as IL&FS Non-Executive Chairman

Our Bureau Mumbai | Updated on October 01, 2019 Published on October 01, 2019



IL&FS’ Non-Executive Chairman Uday Kotak was granted a year’s extension by the government as the debt-ridden infrastructure lender is currently in the midst of addressing ₹36,400 crore out of its total debt of ₹94,216 crore.

The Central government, on the recommendations of the Reserve Bank of India, granted exemption from application of a clause in the Banking Regulation Act, 1949, which precludes the appointment of a bank chief from holding a board level position in another financial intermediary.

This has paved the way for the continuation of Kotak, Managing Director and Chief Executive Officer of Kotak Mahindra Bank, as Non-executive Director of IL&FS for a further period of one year with effect from October 3.

In its one-year progress report, IL&FS said the eight member board has navigated through complexity and developed resolution plan for all the 302 entities (169 domestic and 133 foreign) under its umbrella, spread across more than a dozen verticals, including transportation, engineering and procurement, urban infrastructure, energy, maritime and ports, and financial services.

The report said that IL&FS is targeting to achieve resolution for significant quantum of addressable debt by March 2020. Among the debt being addressed, the report said wind special purpose vehicles with debt aggregating ₹4,320 crore are being sold to ORIX; bids for entities in roads and education segments (with debt aggregating ₹10,150 crore) are being submitted to the committee of creditors; and in infrastructure investment trust route is being considered for entities with low/ no bids (with debt aggregating ₹10,830 crore).

Among the challenges being faced by the board include onerous commercial agreements with counterparties; coercive creditor actions in contravention of court order – auto debit, non-creation of FDs; formal approval for resolution framework awaited; and high manpower attrition, limiting bandwidth in the midst of increasing requirements.

Published on October 01, 2019
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