New Delhi, Sep 22, 2021- The government has again extended the term of Uday Kotak as non-executive chairman of Infrastructure Leasing and Financial Services (IL&FS) to maintain continuity in the resolution plan being operatives for the indebted group.
As per a notification by the department of financial services, Kotak, who is also the managing director and chief executive officer of Kotak Mahindra Bank would continue being the non-executive chairman on the board of IL&FS for another period of six months until April 2, 2022.
Kotak’s tenure at IL&FS has already been given several extensions (about three since 2018) as the government believes that he will guide the company out of the current mess by completing the successful resolution of all stressed assets.
The Banking Regulation Act, 1949 prohibits a banking company to be managed by an individual who is a director of any other company. However, the provision does not apply for a temporary period not exceeding three months or such further period not exceeding nine months if allowed by the Reserve Bank of India (RBI).
The fresh six month extension for Kotak comes on the recommendations of the Reserve Bank of India (RBI). The apex bank had earlier also given the recommendation to continue with Kotak at the helm of IL&FS during its restructuring. Already, the IL&FS management under Kotak has resolved a substantial portion of the Rs 90,000 crore debt. The resolution strategy also involves selling several assets of IL&FS.
C.S. Rajan, MD, IL&FS said : “The IL&FS is privileged to enjoy the continued leadership of Mr Kotak for another 6 months. I am confident that under his guidance the IL&FS would accomplish the resolution targets set.” (Agency)