Govt open to hiring outsider as IFCI CEO

Written by Arun S | Raj Kumar Ray | New Delhi | Updated: Jun 19 2013, 07:52am hrs
The finance ministry is open to appointing an 'outsider', including private sector professionals, to the board of IFCI as well as its chief executive officer, which is vacant after Atul Kumar Rai resigned last month.

Ministry sources told FE that the IFCI Board revamp and appointment of its CEO and MD will be completed by July-end. The process has been set in motion even as the ministry is looking at alleged financial and other irregularities in the Delhi-based IFCI, an official said.

"We are seriously looking into shaking up the management of IFCI," a senior ministry official said. Another official said the rules do not bar any 'outsider' from applying for the CEO's post.

The ministry has recently made its intention clear in appointing private sector professionals to government-owned bodies. Incidentally, the name of Deepak Bagla, a partner with the private equity firm 3i, is being considered for the post of IIFCL chief. The government also appointed a non-bureaucrat and former LIC chairman T S Vijayan as the chairman of the insurance regulator IRDA.

IFCI appointments were earlier from the government-owned IDBI, when the latter had a majority stake in IFCI. Rai, who headed IFCI, was also not an outsider as he was an IAS officer working in the banking division of the finance ministry. Rai had taken voluntary retirement from government to join IFCI. Last month, IFCI's top post fell vacant after Rai quit amid allegations of irregularities and staff unrest. The ministry appointed Anurag Jain, a joint secretary in the department of financial services as the interim CEO and MD. The government, which has periodically bailed out IFCI since 2001 to overcome its financial woes, became its majority stakeholder last year with a 55.57% stake when it converted optionally convertible debentures worth R923 crore into equity.

The slowdown in the economy impacted IFCI badly as its net non-performing assets rose to 10.2% of advances during 2012-13 from 1.9% in 2011-12 and its net profit reduced to R532 crore in 2012-13 from R715.76 crore in 2011-12.