IL&FS board replaces arm nominee-members

MUMBAI: In a move that could hasten sale of assets, the newly-constituted board of IL&FS has replaced nominee-directors on the boards of its subsidiaries. The board also approved formation of a core operating committee under vice-chairman and managing director Vineet Nayyar. The board decision comes at a time when there are reports that private equity firm KKR and Cube Highways are among those keen on buying IL&FS assets.

The decision was taken in the second meeting of the board, chaired by Uday Kotak, which was set up by the government and approved by the National Company Law Tribunal. The board also said that it had initiated austerity measures related to personnel and operating expenses.

According to sources, the presence of the government-appointed members on the board of the subsidiary companies will reduce uncertainty. Subsidiaries like IL&FS Transportation Networks have been in talks with potential buyers for sale of assets. A decision on a sale would have to be approved by the board. The sale process had stalled as the parent board was replaced and some of the former board members on the parent were present in the subsidiary.

Based on the recommendations of the audit committee, which is headed by Nand Kishore, the board called for a full audit of the standalone and consolidated accounts as on September 30, 2018. In terms of the NCLT order, the board is required to give a resolution road map for the company by October 31. The erstwhile board of the company had appointed Alvarez and Marsal to submit a resolution road map. This decision was to be reviewed by the new board. It is not clear whether the new board has taken a decision to hire a consultant to help draft a resolution plan.

On Friday, IL&FS Transportation Networks said that the company is looking at monetising its project assets to free up financial resources. However, there were no definitive agreements entered with any investor for sale of projects being undertaken by the company. The statement was issued to the stock exchanges in response to reports that the company was in talks with Cube Highways for sale of road assets.

Among the subsidiaries, IL&FS Financial Services will have Nayyar, Kishore and Malini Shankar on the board. Nayyar and C S Rajan are on the board of IL&FS Transportation, while Kishore is on the board of IL&FS Environmental Infrastructure. G C Chaturvedi and Nayyar on the board of IL&FS Engineering.