IL&FS fraud case: Board to set up sub-committee to oversee process of disinvestment

New Delhi: Debt-ridden IL&FS has decided to constitute a sub-committee to oversee the process of divestment of its assets in light of the Reserve Bank of India’s 7 June circular which has laid guidelines for resolution of bad loans.

The decision to form a sub-panel was taken in its board meeting held on 28 June, Infrastructure Leasing & Financial Services Ltd (IL&FS) said in a statement.

During the meeting, IL&FS board reviewed the progress on the divestment of all domestic and foreign assets outlined in its resolution framework.

The board has decided to constitute a six-member empowered committee, including four directors Vineet Nayyar, C S Rajan and Bijay Kumar to discuss and finalise the asset-wise framework of resolution with lenders.

The board decided to empower the panel to take necessary steps to enhance enterprise value of assets under divestment.

“This committee is formed in view of positive response received from financial institutions to the framework outlined, by Prudent Norms for resolution of stressed assets issued by RBI on 7 June earlier this year,” it said.

After the Supreme Court quashed RBI’s guidelines on stressed assets, released in February 2018, the central bank on 7 June came out with revised norms which gave more room to lenders for resolution of bad loans.

It further said the board also decided to allow the bidders for toll road assets to jointly monitor traffic data and assess revenue stream.

The board noted that the stake sale in seven wind energy special purpose vehicles (SPVs) is in the final stage after Orix has conveyed its decision to match GAIL’s offer.

LIC, which is IL&FS biggest shareholder with a more than 25 percent stake while Japan’s ORIX Corp with a 23.54 percent stake and Abu Dhabi Investment Authority with 12.56 percent.