IL&FS default has severely hit investor trust, says Sebi chairman Tyagi

Tyagi calls for better monitoring of end use of funds

The default by IL&FS has “severely” impacted the trust and confidence of investors, said Ajay Tyagi, Chairman of Securities and Exchange Board of India (Sebi).

“Trust and consequently investors’ confidence has been severely impacted due to developments in the recent months, particularly as a result of default by a large entity,” he said, without naming the infrastructure financier. 

IL&FS’ failure to obey repayment obligations has triggered panic in both debt and equity markets, with investors fretting over cascading effects of the default. 

“One of the issues this episode has brought out is the interconnectedness arising as a result of complex corporate subsidiary structures,