Crisis-ridden Infrastructure Leasing and Financial Services Ltd (IL&FS) on Friday said its board, led by banker Uday Kotak, has initiated several austerity measures related to personnel and operating expenses at the company. The board has also asked for a full audit of the stand-alone and consolidated accounts as on September 30, 2018.
The seven-member board of IL&FS, in its second meeting, also appointed nominee directors for eight of IL&FS subsidiaries, and held detailed deliberations in relation to the road map ahead. “The board initiated several austerity measures related to personnel and operating expenses. Pursuant to the recommendations of the Audit Committee, the board required a full audit of the stand-alone and consolidated accounts as at September 30, 2018,” it said.
The board also approved formation of a Core Operating Committee under the vice chairman & managing director Vineet Nayyar. “The board had detailed deliberations in relation to the road map ahead,” IL&FS said.
As permitted by the order dated October 9 of NCLT, the board has initiated the replacement of its nominee directors on various subsidiaries of IL&FS.
It has now nominated directors from among the present board, based on recommendations of the Nominations & Remuneration Committee. Nayyar, Nand Kishore and Malini Shankar have been appointed on the board of IL&FS Financial Services, Nayyar and CS Rajan on IL&FS Transportation Networks, Nand Kishore on IL&FS Environmental Infrastructure & Services, GC Chaturvedi and Nayyar on IL&FS Energy Development Company (IEDCL), CS Rajan on IL&FS Engineering & Construction Company (IECCL), Nayyar on IL&FS Education & Technology Services Limited (IETS), Nand Kishore on IL&FS Technologies and Malini Shankar on Tamil Nadu Water Investment Company (TWIC).
In its first meeting on October 4, the board reconstituted four statutory committees — audit committee, nomination and remuneration committee, stakeholder relationship committee and corporate social responsibility committee. “We’re evaluating options to ensure that the fair value of the asset and the enterprise is preserved to the maximum extent that we can do and find a fair resolution mechanism,” Kotak said after the first meeting of the newly constituted board of directors of IL&FS.
Kotak had then said the board will meet frequently as the scale of issues facing IL&FS is more complicated than was expected. “The most important thing is to rebuild trust. The markets do not like any uncertainty, whether it is good or bad, and we are committed to provide clarity in an open and transparent manner,” he had said. IL&FS has 348 subsidiaries and associates.
On October 1, the government had moved the Mumbai bench of the National Company Law Tribunal to supersede the board of IL&FS, which had defaulted on payments of over Rs 3000 crore over a two-month time period. The new board members are: Uday Kotak, vice chairman and MD of Kotak Mahindra Bank, retired IAS officer Vineet Nayyar, former Sebi and LIC Chairman G N Bajpai, former IAS officer and ICICI’s non-executive chairperson G C Chaturvedi, Director General of Shipping and Maharashtra cadre IAS officer Malini Shankar and former Deputy Comptroller and Auditor General (CAG) Nand Kishore. Former Rajasthan State Secretary CS Rajan also joined the new IL&FS board later.