The Centre on Monday seized control of the debt-ridden Infrastructure Leasing and Financial Services (IL&FS) and superseded its board in order to save the firm from financial collapse.
“The government, after analysing the emerging situation of the IL&FS Group, came to the conclusion that the governance and management change in IL&FS Group is very necessary for saving the group from financial collapse,” the finance ministry said in a statement.
“Continuance of the present board had become prejudicial to the interests of the company and its members and this management was affecting public interest because of its adverse impact on financial stability and making capital markets so adversely affected.” .
“Therefore, the National Company Law Tribunal (NCLT) was approached today by the government under section 241 read with 242 of the Companies Act, 2013 to order supercession of the present Board of Directors of the IL&FS and its substitution by the new Board of Directors,” the statement said. .
It said the government stands fully committed to ensuring the much needed liquidity arranged for the IL& FS from the financial system so that no more defaults take place and infrastructure projects are implemented smoothly. .
With a debt of Rs 91,000 crore, the IL&FS crisis threatened to hit the completion of at least two lines of Bengaluru’s Namma Metro project – Mysuru Road and K R Puram Silk Board – on which the Mumbai-based infrastructure development firm was working. .
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