The National Company Law Tribunal (NCLT) on Monday allowed the government to take over the control of debt-ridden Infrastructure Leasing and Financial Services (IL&FS) by dissolving the entire board, whose recent defaults has roiled Indian market and has sparked fears of a contagion.
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The tribunal has allowed the government's petition to replace all board members of IL&FS with its six-member board, which will be headed by veteran banker Uday Kotak.
The new board will meet and consider a rescue roadmap for the group before October 8, 2018. This is the first time that the government has taken over the board of a big private company post-Satyam in 2009.
CNBC-TV18 caught up with experts to find whether the resolution of the IL&FS mess is as quick as Satyam.
Nand Kishore, newly-elected member of IL&FS board:
"I have heard about the reconstitution of the board only from the news channel," Kishore said. "Let me be honest, I haven't applied myself to the problems of IL&FS but definitely, the mandate would be to diagnose the problems that are there."
The board will look into the nasty surprises in the balance sheet or in the accounts and structures and then think of the solutions, he said.
But at this point in time, these are very general kind of approaches and what specific steps would be required to be taken will decide after the board meeting, Kishore added.
Kiran Karnik, former chairman, Satyam board:
"I do not want to comment on the IL&FS matter itself, but I am happy to share with you Satyam experience, which could be important in the next steps," Karnik said. "In my experience in any service industry, the critical things are to retain your customers and retain the most important asset you have which is your talent, your staff and working on these two would be critical."
The board needs to look at the legal issue to safeguard the fact that the process that they begin does not get either derailed or stalled altogether by some stay order or something else, Karnik said.
On challenges, the new board may face Karnik said, The board should get enough time to get into the matter, to create confidence with both customers and staff.
The board has to look ahead in the immediate future as to what are the kind of resolution paths that are good and appropriate given the situation of the company, he said.
