Governance failure

IL&FS directors erred in their fiduciary duties

The government’s use of the Companies Act to reform the board of the troubled shadow banker Infrastructure Leasing & Financial Services (IL&FS) has caused some of the former members of the board to speak out about the company’s troubles. Independent directors have argued that, while they were aware of IL&FS’ financing troubles, they were unable to act on them because of the attitude of the directors nominated on behalf of major shareholders. IL&FS’ shareholders include the Life Insurance Corporation of India (LIC), which owns just over a quarter of the company, and a major Japanese investment corporation. The State Bank