IL&FS Financial Services MD and CEO Ramesh C Bawa steps down

The chief executive of crisis-ridden IL&FS Financial Services, Ramesh C Bawa, has resigned from his post on Friday, effective immediately. In his stead, the company is most likely to appointe incumbent executive director Kaushik Modak as the Managing Director and Chief Executive Officer, reports said.

Four independent directors, namely Renu Challu, Shhubhalakshmi Panse, Uday Ved and SS Kohli, and non-executive director Vibhav Kapoor have also resigned from the board along with Bawa. This development comes close on the heels of an announcement by the beleaguered group that it will not be able to honour its obligations against the debt of Rs 250 crore.

On September 4, it came to light that IL&FS defaulted on a short-term loan of Rs 1,000 crore from SIDBI, while a subsidiary has also defaulted Rs 500 crore dues to the development finance institution.

The company is sitting on a debt pile of around Rs 91,000 crore and had been downgraded to junk status by rating agencies following the default. Of this, Rs 57,000 crore are bank loans alone, most of which are from state-run lenders.

While IL&FS has nearly Rs 35,000 crore consolidated debt, IL&FS Financial Services has Rs 17,000 crore of debt, which sits as standard asset for most of the lenders, according to a Nomura India report.