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The government today restructured the board of IFCI Ltd by nominating two new directors in the wake of its raising stake in the domestic financial institution (DFI) to 55.57 per cent.
Four existing members have already stepped down from the board, while further changes are likely soon.
A decision to restructure the board was taken late last night and comes on the back of government raising its stake IFCI to 55.57 per cent.
The government has nominated two directors – Anurag Jain, Joint Secretary, Ministry of Finance, in the Department of Financial Services and VK Chopra, Deputy Secretary – on the IFCI Ltd board, the company said in a filing to the BSE.
The DFI said four directors who have stepped down from the board are: Sanjeev Kumar Jindal, Shobhit Mahajan, Atul Ashok Galande and S Shabbeer Pasha.
In August, the Cabinet had approved the conversion of debentures worth Rs 923 crore that it held in IFCI into equity, following which its stake in DFI to 55.57 per cent. Since 2001, the government had been giving funds to IFCI to help it tide over financial problems. It initially gave Rs 400 crore in the form of 20-year OCDs.
In 2002-03, as part of the financial restructuring package of Rs 5,220 crore, the government gave IFCI Rs 523 crore as loan in the form of OCDs. However, the government stopped releasing funds after IFCI started making profits.
The decision to go ahead with the conversion of OCDs into equity was taken by the Committee of Secretaries and the government had also taken exemption from Sebi for application of the takeover code.