The National Company Law Tribunal upon being approached by the government has allowed it to replace the ILFS Board

The National Company Law Tribunal upon being approached by the government has allowed it to replace the ILFS Board.

 Banker Uday Kotak will be its non-executive chairman along with 5 other government nominees. The Finance Ministry has said it stands fully committed to ensure liquidity for ILFS from the financial system..here are the details.

 After serious corporate related deficiencies in the ILFS holding company and its subsidiaries surfaced, the centre on Monday took a decisive and firm step to supersede the existing board.

 Centre called it an emergent need to immediately stop further financial defaults and also take measures to resolve defaulted dues to the claimants.

 Giving top priority to the confidence of the financial market in the credibility of the IL FS management and the company needs prompted the centre to take the step.

 The government has assured that it stands fully committed to ensuring that needed liquidity is arranged for the debt-trapped ILFS to prevent any more defaults in payment of loans by the non-banking financial company.

 The Government said that after analysing the emerging situation of the ILFS Group it came to the conclusion that the governance and management change in ILFS Group is very necessary for saving the Group from financial collapse.

 Therefore, the National Company Law Tribunal was approached by the centre to order supersession of the present Board of Directors of the ILFS and its substitution by the new Board of Directors.

 Finance Ministry further said that the move was essential to restore confidence in the financial market and hoped that financial institutions would provide the NBFC liquidity.

 It added that the confidence of the financial market in the credibility of the ILFS management and the company needs to be restored.

 Centre has said that it would also take all necessary steps to ensure that the infrastructure and other productive sectors of the economy continue to get financial resources to maintain the growth momentum of the Indian Economy.

 If further said that there have also been serious complaints on some of the companies for which an SFIO investigation has been ordered into the affairs of ILFS and its subsidiaries.

 The NCLT has approved reconstitution of ILFS board appointing six members including Uday Kotak as non-executive chairman.