NEW DELHI: Government is planning to provide immunity to the newly appointed board of Infrastructure Leasing & Financial Services’ (IL&FS), similar to the support extended to the new board of Satyam so that they can take decisions and initiate action, without any fear of legal action.
“The government is planning to give immunity to the new board led by Uday Kotak, so that they are able take some decisive action, without any pressure or fear of legal action,” a senior official from the Ministry of Corporate Affairs told TNIE.
On Monday, the government dismantled the 15-member previous board of IL&FS, and constituted a new board with six members that included bureaucrats and industry specialists. Uday Kotak has been appointed as the non-executive chairman of the board, after it found mismanagement on the part of IL&FS board.
The official added that this is not for the first time immunity will be given to the board.
“Similar immunity was given to the board of Satyam when the government had superseded its board,” the official added.
In 2009, the government superseded the board of Satyam, when it reported a fraud of Rs.7,000 crore. It then nominated Deepak Parekh -banker, Kiran Karnik - former NASSCOM chief and C Achuthan - former SEBI member to the Satyam's board. That time the company law board had passed an order providing immunity to six government-appointed board members and other new appointees of Satyam Computer Services from all legal action.
Now with all eyes on the newly appointed board for a future guideline, it is likely to meet tomorrow, say sources, after it gets approval from the RBI and the market regulator SEBI. The decision on the rights issue would be taken after the board meeting of IL&FS.
According to the sources, the board will have to give a first-hand assessment report, which will be presented at the decisive meeting, scheduled for October 8. The new board will also submit a new revival action plan within a fortnight.
Shareholders are looking forward to the steps that the new board would be taking to address the liquidity issue and raise resources to tide over the cash crunch.