Ramesh Bawa, the managing director and chief executive officer of IL&FS Financial Services, resigned from the post on Friday, the company informed the exchanges. The development comes amid trouble brewing with its parent company, Infrastructure Leasing & Financial Services (IL&FS), which is facing a liquidity crunch, and has defaulted on commercial papers resulting in a rating downgrade.
IL&FS also informed the exchanges that the company was unable to service letter of credit (LC) to IDBI Bank that was due on Thursday, a bank holiday, and hence payable on Friday.
“The company was unable to service its obligation in respect of LC payment to IDBI Bank due yesterday which was non-banking day and hence payable today i.e. on September 21, 2018,” the company said in a notification to the exchanges.
Mr. Bawa was also on the board of IL&FS.
His resignation also comes amid reports of IL&FS looking to sell majority stake in IL&FS Financial Services and other assets to repay debt.
Earlier, this week, IL&FS Financial Services had informed that it had defaulted on commercial papers due on September 18.
