Mumbai: The Ministry of Corporate Affairs has moved the Mumbai bench of the National Company Law Tribunal (NCLT) against Infrastructure Leasing & Financial Services (IL&FS) and its subsidiaries seeking a change of the board and management control of the company.

On Monday, Sanjay Shorey, joint legal director in the ministry of corporate affairs, argued that the government wanted to appoint 10 directors on the board of the company approved by the tribunal in order to save IL&FS from sinking further.

Fresh funds will be infused into the company when the new board comes up with a revival plan," argued Shorey, who was representing the government before the tribunal.

“We have identified a few people who have credibility. The list includes names, including Uday Kotak, as non-executive chairman and one of the director among others," he said.

The government further argued the new board be empowered to change the boards of IL&FS subsidiaries as well.

The counsel also informed the tribunal that the Special Fraud Investigation Office (SFIO) had initiated an investigation into the matter.

“Ravi Parthasarathy, along with CEOs and CFOs, were painting a rosy picture of the company deliberately despite knowing the truth," argued the Shorey. He added that the difficulties of the company could create issues for the financial sector as a whole and that was why the government wanted to change the board.

The tribunal presided by M K Shrawat and Ravi Kumar Duraisamy observed that the government was taking quick steps to salvage the situation which was commendable and asked the MCA to file an affidavit with other names for the appointment and reserved its order till after lunch.

Also read: Why IL&FS may not be out of the woods

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