Uday Kotak meets Corp Affairs Secy on IL&FS issue

IL&FS Group Chairman Uday Kotak Wednesday held a meeting with Corporate Affairs Secretary Injeti Srinivas as the new board works on ways to address the problems at the diversified entity, according to sources.

The IL&FS crisis has sparked off concerns of liquidity crunch in the financial markets. Last week, the government said that having a new board of IL&FS was the necessary first step towards restoring the confidence of the financial market in the IL&FS Group.

Sources said Kotak, who is the non-executive chairman of IL&FS after the government superseded the board of IL&FS last week, met Srinivas.

Specific details about discussions at the meeting could not be immediately ascertained.

On October 1, the government superseded the board of IL&FS and appointed a six-member board with Kotak as the non-executive chairman. The new board, which held its first meeting on October 4, is likely to meet again soon.

In a significant development, the National Company Law Tribunal (NCLT) has allowed the new board of directors to "replace" directors at subsidiaries, joint ventures and associate companies of IL&FS.

As per the Corporate Affairs Ministry, IL&FS Group has around 348 direct or indirect subsidiaries, associate companies and joint ventures.

Further, the NCLT, in an order dated October 9, said that "actions of the newly-appointed directors done in the good faith, in the interest of the company, various stakeholders, including public at large, the same are protected".

The tribunal also allowed the new board to elect among themselves anyone as whole-time director and/ or managing director.

In this regard, "no further procedure prescribed in the Memorandum/ Articles of Association of R1 company (IL&FS) and the procedures prescribed under the Companies Act, 2013 or rules made thereunder are required to be followed in the instant case", the NCLT said.

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