Surprised by govt's takeover of IL&FS? Here's the story behind the move

In a secret memo, the finance ministry said it was concerned that just Rs 28 billion of IL&FS securities owned by mutual funds could set off a chain reaction of redemptions by investors

With the future stability of the Indian financial system on the line, executives running a giant infrastructure lender gathered at the company’s glassy, modernist headquarters in Mumbai and hammered out an ambitious restructuring plan last Saturday to manage a $12.6 billion debt burden after a string of defaults.

Except that they weren’t really calling the shots any more. The very next day, the government in New Delhi authorized a move to sweep in and seize control of Infrastructure Leasing & Financial Services Ltd., a vast conglomerate that’s raised billions of dollars in the corporate bond market and powered the nation’s public