Mumbai: Top corporate tribunal National Company Law Tribunal (NCLT) on Monday allowed dismissal of management of the beleaguered IL&FS.
A new 6-member board headed by Uday Kotak will lead the debt ridden IL&FS board.
The development comes a day after Congress President Rahul Gandhi alleged that public money was being used to bail-out IL&FS. IL&FS, where LIC is the largest shareholder with 25.34 per cent stake, has a debt burden of over Rs 90,000 crore.
The company in its Annual General Meeting sought shareholders` permission to carry out its plans to recapitalise itself. Recently, IL&FS Financial Services, a group company, defaulted in payment obligations of bank loans (including interest), term and short-term deposits and failed to meet the commercial paper (CP) redemption obligations due on September 14.
On September 15, the company reported that it had received notices for delays and defaults in servicing some of the inter corporate deposits accepted by it.
Consequent to defaults, rating agency ICRA downgraded the ratings of its short-term and long-term borrowing programmes.
IL&FS Ltd is a core investment company and serves as the holding company of the IL&FS Group, with most business operations domiciled in separate companies which form an ecosystem of expertise across infrastructure, finance and social and environmental services.
Initially promoted by the Central Bank of India, Housing Development Finance Corporation Ltd and the Unit Trust of India, IL&FS was incorporated in 1987.
Over the years, it has inducted institutional shareholders including SBI, LIC, ORIX Corporation of Japan and Abu Dhabi Investment Authority (ADIA).
As on March 31, 2018, LIC and ORIX Corporation are the largest shareholders in IL&FS with their stakeholding at 25.34 percent and 23.54 percent, respectively. Other prominent shareholders include ADIA (12.56 percent), HDFC (9.02 percent), CBI (7.67 percent) and SBI (6.42 percent).