After getting immunity from National Company Law Tribunal (NCLT), the new board of beleaguered Infrastructure Leasing & Financial Services (IL&FS) has also got permission for inducting new directors in subsidiaries and several joint ventures it has under its umbrella.

The government is very clear that even the new directors will get an immunity from future actions and litigations since the collective effort is to get the company back into shape, said people familiar with the matter.

“Reasonable progress has been made by the government appointed IL&FS board led by Uday Kotak and they have now received certain relief from NCLT," sources privy to the matter told CNBC-TV18.

Also Read: IL&FS board expects complete turnaround of the company in 12 months

Ahead of the second board meeting on October 12, the IL&FS board chairman Uday Kotak on Wednesday met the corporate affairs secretary Injeti Srinivas to give him a first-hand assessment of the infrastructure development and finance company.

“We just started one week back," Kotak told reporters after the meeting. "We are consulting the government and making progress on IL&FS. We will get back to you at an appropriate time.”

Since its appointment on October 1, the new board has been trying to understand the magnitude of the liquidity crisis in IL&FS and other threats that the conglomerate is facing.

Meanwhile, sources added that Uday Kotak led board informed the government that they are planning to hire a professional agency to do due diligence and fact-finding in the company.

The government also feels that this step will be crucial to bringing a “complete and reliable picture of IL&FS."

The government would not rule out whether IL&FS crisis is actually a case of a fraud or a scam until the new board gets back to them with a complete picture, added the sources.

The Serious Fraud Investigation Office (SFIO) is also investigating into the company's business after serious complaints on some of its companies surfaced.

On October 1, the government superseded IL&FS' board and appointed a new six-member board with Uday Kotak as the non-executive chairman.

After the new board's first meeting, Kotak had briefed the media, suggesting the IL&FS crisis appears more complex than it looks like as there were as many as 348 subsidiaries of the parent company, much more than was apparent earlier.

Since August, IL&FS has defaulted on multiple debt instruments issued by it, which have had a contagion impact on all lenders, particularly non-banking finance companies (NBFCs).

The board is also looking at rationalisation when it comes to the utilisation of funds at the company, and the government is assisting the new board when it comes to settlement of claims with public sector undertakings (PSU) and National Highways Authority of India (NHAI).

On being asked, whether the board has put forward any demand for fund infusion, sources said that the new board has not yet raised any such red flag and as far estimates are concerned, the company needs about Rs 100 crore to remain afloat every month.

When it comes to the role of auditors, sources added that the case of IL&FS and its auditors' role will be sent to the National Financial Reporting Authority (NFRA).

First Published:Oct 10, 2018 8:06 PM IST