IDFC brass resigns to thwart takeover

CEO Nasser Munjee, 6 other directors defy govt on move to merge IDFC with SBI.

The top management at Infrastructure Development Finance Company (IDFC), led by its Managing Director and CEO Nasser Munjee, has quit in protest against the government's plan to hand over IDFC to the State Bank of India (SBI).

Besides Munjee, the others who have put in their papers are A K T Chari, Anoop Seth, Y M Shivamurthy, L K Narayan, Urjit Patel and Luis Miranda. All of them are on the board of either IDFC or its group companies.

Chari is chief operating officer, Seth chief financial officer, Patel chief policy adviser, Narayan chief risk officer and Miranda chief executive officer of the India Development Fund, an IDFC group firm.

"The top management has resigned in disagreement with the government's decision to hand over IDFC to SBI. It is not an empty threat, we have already put in our papers. The government's proposal is not in the interest of the shareholders, the staff or infrastructure financing," Munjee told Business Standard.

Munjee, however, hinted that the management would reconsider its decision if the government called off the merger. "We will be prepared to reconsider (our decision) if permitted (by the government)," he said. Munjee had earlier quit Housing Development Finance Corporation (HDFC) to head IDFC. He declined to talk about his next assignment.

The seven directors will be with IDFC till April 30. The present board will meet for the last time on April 20 to pass the audited accounts for 2003-04. Deepak Parekh is, however, likely to remain chairman of the company even after SBI takes over.

Sources said a committee of directors had been constituted to look into the resignations. While Parekh will head the committee, Vinod Rai, additional secretary in the finance ministry, will represent the Centre. The other members of the committee will be SBI Chairman A K Purwar, AIG country-head Sunil Mehta and corporate lawyer Shardull Shroff. The committee is expected to submit its report at the IDFC board meeting on April 20.

It is understood that an SBI deputy managing director will head IDFC from May. A few more senior SBI executives will be sent to IDFC on deputation.