Apropos your editorial “Time for swift action” and the front page report “Govt takes control over IL&FS” (October 2); one must acclaim the “surgical strike” by the National Company Law Tribunal and the government, by superseding the entire board of IL&FS and bringing in people of impeccable reputation and proven record. This move — as you say — “echoes the Satyam move” but this is a much bigger case with complex operations. Salvaging this one would need much more than what was done in the case of Satyam.
If one were to believe the Ministry of Corporate Affairs’ petition — all admiration for their no-holds-barred charges — “IL&FS is left with no assets, no credibility, nothing to offer to the stakeholders...”, the fraud committed by the outgoing management is of gigantic proportions. It is unbelievable that they could not see any sign of what was coming or was it all pre-planned? What about the auditors and regulators involved with their myriad operations? Hopefully, the Serious Fraud Investigation Office (SFIO) probe will unravel the great mystery.
I don’t think immediate liquidity support is a great idea. The new board must be charged with the responsibility of expeditiously selling the assets, fixing responsibility for everything that went wrong and, better still, making a clean sale of the parent company at whatever valuation it still commands and lend support to the new buyer to turn it around. Their names and presence on the board itself is more than sufficient to instil confidence in the investor community.
Krishan Kalra Gurugram
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