New Delhi: A day after the government superseded IL&FS board, former independent directors of the crisis-ridden group has written to new Chairman Uday Kotak extending their ‘complete support’ in the revival of the entity.
Five former independent directors, including former Chairman S B Mathur, in a letter, have also mentioned about IL&FS being unable to raise additional equity despite several attempts and the ‘asset-liability’ mismatch that continued to aggravate.
Other independent directors are R C Bhargava, Michael Pinto, Jaithirth Rao and Rina Kamath. While assuring their ‘complete support’, the independent directors said the government’s action is the correct one as it enables reaching out to various counter parties, including debtors and creditors of IL& FS, from a position of strength and clarity.
“Despite several attempts during our tenure, IL&FS was unable to raise additional equity directly or at the level of its subsidiaries. It was also unable to complete a merger with a strategic party which failed to consummate in the final stretch,” the letter said.
According to him, new BOT-PPP (Built Operate Transfer-Public Private Partnership) projects in IL&FS’ large subsidiary ITNL have been discontinued for three years now.
“With its mounting counter-party receivables and the need to continue with existing projects and the absence of long-term financial support in the markets, the asset-liability mismatch continued to aggravate almost inexorably… we believe that this structural conundrum needs to addressed for all infrastructure financing in the country,” the letter said.
The government on Monday said 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.