TMI Blog2018 (10) TMI 340X X X X Extracts X X X X X X X X Extracts X X X X ..... tional affidavit only 6 names (supra) of the Board members have been proposed by the Union of India. As Further directed that the present Board of Directors be suspended with immediate effect. The six Directors as reproduced supra shall take over the R1 company immediately. Newly constituted Board shall hold a meeting on or before 8th October, 2018 and conduct business as per the Memorandum and Articles of Association of the company and the provisions of the Companies Act, 2013. Liberty is granted to the Board of Directors to select a Chairman among themselves. Thereafter, report the roadmap to NCLT, Mumbai Bench at the earliest possible not later than the next date of hearing. The suspended directors henceforth shall not represent the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal in terms of 242(2)(k) of the Act be authorised to replace such number of directors of subsidiaries, joint ventures and associate companies as may be required to make the R1 and its group companies as going concern. 2. From the side of the Central Government, duly authorised officer representing Ministry of Corporate Affairs Mr. Sanjay Shorey, Joint Director (Legal), appeared and explained the merits of the case. 3. At the outset, it is worth to mention that Senior Advocate Mr. Ravi Kadam appeared representing R1 namely, Infrastructure Leasing And Financial Services Ltd (IL FS Ltd) and stated that under the instructions of R1 neither he is opposing the Petition of the Central Government nor he is supporting this Petition. Duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 12.56% 5. Housing Development Finance Corporation Limited 9.02% 6. Central Bank of India 7.67% 7. State Bank of India 6.42% 8. UTI- Unit Linked Insurance Plan - UTI Asset Management Company Limited 0.82% 9. India Discovery Fund 0.86% 10. Others 1.77% TOTAL 100% 5. That the Petitioner submits that the R1 during the financial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that Mr. Parthsarathy has already resigned and relieved from the services of the company from July, 2018. Further informed that Respondent No. 10 and Respondent No. 11 are at present Chief Financial Officer and Company Secretary respectively. The allegation is that the Managerial persons are responsible for negligence and incompetence. According to the allegations, a rosy financial statement was projected. He has further emphasized that the directors of Rl have failed to discharge their fiduciary duties which is based on mutual trust and confidence. It is informed that to unearth the irregularity and for investigation, the provisions of Section 212 (1) (c) of the Companies Act were invoked for investigation into the affairs of the company. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oubt about the correctness of the financial statements. 6.6 It has also been informed by the Ld. Representative of the Government that the Dept. of Economic Affairs has raised Red Signals expressing great concern of likelihood of collapse thus expressed immediate further necessary action by the Ministry of Corporate Affairs under the Companies Act, 2013. For ready reference the said Office Memorandum bearing NO.10/41/SM/2018, dated 30.9.2018 of the Adviser (FSRL), Ministry of Finance, Department of Economic Affairs is reproduced below: The Department of Economic Affairs has been watching the developments in the financial market arising out of default by IL FS Group. The matter has been examined from the point of the financial st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c. Shri G. N. Bajpai, Ex. Chairman, SEBI d. Shri G. C. Chaturvedi, Non-Executive Chairman, ICICI Bank Ltd e. Dr. Malini Shankar, IAS f. Shri Nand Kishore, IA AS (Retired) Directions 8. On the basis of the foregoing discussions and after considering the facts of the case, as narrated in the Petition filed by the Union of India, this Bench is of the considered view that it is judicious to invoke the jurisdiction prescribed under Section 241(2) of the Companies Act, 2013 and the Tribunal is of the opinion that as per Section 242 (1) of the Companies Act, 2013, the affairs of the IL FS were being conducted in a manner prejudicial to public interest. The interim prayer of suspending the present Board of Directors and recons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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