Special Correspondent

Board slated to meet on September 20 for ratifying resignations

NEW DELHI: Close on the heels of N. Balasubramanian putting in his papers as IFCI Chairman last week owing to his association with one of the bidders in the equity stake sale of the financial institution (FI), another Director, Vinayak Chatterjee, on Tuesday resigned from the Board over the same issue.

Mr. Chatterjee’s resignation has also come about over the potential conflict of interest issue. For, apart from being on the board of the country’s oldest FI, he is also the Chairman of Feedback Ventures in which both HDFC and IDFC have equity stakes. The conflict of interest stems from the fact that the two companies have also evinced interest in picking up IFCI’s 26 per cent equity stake on offer for becoming a strategic partner.

The resignation of Mr. Chatterjee, who joined the IFCI board last month, is to come into effect from Tuesday.

Incidentally, Mr. Balasubramanian had also put in his papers on Saturday last in view of his association with Standard Chartered Bank as its Advisor.

Again, Standard Chartered happens to be a partner in one of the consortiums evincing interest in becoming a strategic partner of IFCI.

Stake sale process on

The two resignations have come about even as the process of IFCI’s 26 per cent stake sale is on, with ten entities having submitted ‘Expressions of Interest’ (EoI) on September 14.

Of the two companies having links with Feedback Ventures, while IDFC is a standalone suitor for IFCI, HDFC is associated in a consortium with W.L. Ross, Standard Chartered Bank and Goldman Sachs.

Apart from these prospective buyers, Kotak Mahindra Bank, GE Capital, Cargill, French banking company Natixis, U.S.-based private equity fund manager Blackstone and Newbridge have submitted EoIs. Also in the fray are two more consortia, including Punjab National Bank with Shinsei Bank of Japan and U.S.-based investor JC Flowers and Sterlite Industries in alliance with Morgan Stanley.

With the shortlisting of EoIs in progress, IFCI is to announce the names of the qualified suitors before September 25.

The IFCI board is slated to meet on September 20 for ratifying the resignations as also for taking up other issues. The shareholders’ meeting is to follow the next day.