GIFT City asks new board of debt-laden IL&FS to replace nominees

Gujarat International Finance Tec-City Co (Giftco), promoter of GIFT City near Gandhinagar, set up as an international finance services centre, has approached the new board of directors at crisis-hit Infrastructure Leasing & Financial Services (IL&FS) to replace the latter's nominees on the board of the former.

GIFT City Company was structured as a 50:50 joint venture between the Gujarat government, through its Gujarat Urban Development Company Ltd (GUDCL), and IL&FS.

On the 13-member board of directors at the GIFT City company, where Sudhir Mankad is chairman, there were three from IL&FS — Hari Sankaran, K Ramchand and Arun K Saha.

Early this week, the Union government replaced the board of IL&FS, ujsing powers under the Companies Act, in view of the liquidity crisis at the company which was spreading to the entire finanicial sector. Hari Sankaran and Arun Saha were on IL&FS’ suspended board; Ramchand was associated with the IL&FS for over two decades. The government had also issued lookout notices against these three while suspending them from the IL&FS board.

Hence, the GIFT City board decided the three should not continue here, too, and has sought their replacement.

IL&FS was active at the planning stage during the early days of GIFT City. However, for the past five years, the lattery has been managed by professionals. GIFT is said to be among the most valued assets of IL&FS.

According to GIFT, daily foreign currency business transactions there are worth $12 billion. Also, the sum insured business of the 14 insurance companies and brokers there has crossed $30 bn. And, the daily average trading volume of the two international exchanges, India INX and NSE IFSC, has crossed $1.5 billion.