Atul Kumar Rai Former Managing Director, Chief Executive Officer and Director, IFCI Limited
| Age | Total Calculated Compensation | This person is connected to 41 board members in 3 different organizations across 12 different industries. See Board Relationships |
| 53 | 3,156,000 As of Fiscal Year 2014 |
Background*
Shri Atul Kumar Rai served as Chief Executive Officer and Managing Director at IFCI LTD from July 11, 2007 to May, 2013. Shri Rai served as a Secretary of IFCI Factors Ltd. He holds 20 years experience in Government Service. He served as a Director of Land Finance at Delhi Development Authority and worked in Intelligence Bureau in Department of Industrial Policy and Promotion, Planning Commission, and Forward Market Commission of Government of India. He serves as Chairman
Corporate Headquarters*
IFCI Tower
Phone: 91 11 4179 2800New Delhi, Delhi 110019 India Fax: 91 11 2648 8471 Board Members Memberships*
Former Chairman
Former Director
Former Director
Director
Former Chairman
Chairman and Chairman of Remuneration Committee
2002-N/A
Former Director and Member of Audit Committee
2002-2007
Former Director
2004-2007
Former Director, Member of Audit Committee, Member of Management Committee, Member of Directors Promotion Committee and Member of Customer Service Committee
2007-N/A
Former Deputy Chairman, Chairman of Borrowings & Risk Management Committee, Member of Audit Committee and Member of Committee for Share transfers etc
2007-2013
Former Managing Director, Chief Executive Officer and Director
2007-2009
Former Additional Director
2008-Present
Independent & Nominee Director
2012-2013
Former Chairman
Education*
Unknown/Other Education
University of Delhi
BA
University of Delhi
Master's Degree
Jawaharlal Nehru University
Other Affiliations*
IFCI Factors Ltd.
Atul Rai steps down as IFCI chief at govt behest
Rai could not be reached for comment, senior IFCI executive confirms that he puts in his papers on Thursday
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The finance ministry has, after contemplating the step for a while, asked Atul Rai, managing director and chief executive officer of IFCI, to step down.
While Rai could not be reached for comment, a senior IFCIexecutive confirmed he put in his papers after the ministry asked him to do so. Ministry officials said he’d been asked to go.
In an interview with Business Standard last year, Rai, after being re-appointed by the company board for another five-year term, had said once the control of IFCI went into the hands of the government, it might go for a chief of its choice. Almost half the company’s independent directors stepped down from the board of IFCI after the government acquired majority stake in it around that time.
The immediate trigger for Rai’s being asked to go is reliably reported to be the retirement of Vinod Rai as Union comptroller and auditor-general. Finance ministry officials would not come on record on this. “We did not do anything so far, since it was thought the government was targeting the CAG through Atul Rai,” said one, on condition of anonymity.
Parliament’s Committee of Privileges had, some years before, questioned Atul Rai’s appointment. There was also a controversy when an MP had complained to the panel of Rai having allegedly misbehaved with him when he’d gone to the IFCI office in early 2010.
The government had been giving financial assistance to IFCI in the form of debentures from 2001 to 2007. Later, a committee headed by then Finance Secretary R S Gujral had been formed to look into certain issues. Subsequently, in August 2012, the Cabinet approved conversion of debentures worth Rs 923 crore that the government held in IFCI into shares at par. The government holding in the company rose to 55.57 per cent and it formally became a government-owned company, a tag it had not had for some time.
The Industrial Finance Corporation of India was established in 1948 as the first development financial institution in the country, to cater to the long-term financing needs of the industrial sector. After the reforms of the early 1990s, the constitution was changed in 1993 from a statutory corporation to a company. Subsequently, the name of the company was changed to IFCI Ltd.
Atul Kumar Rai, the CEO and managing director of state-owned financial institution IFCI, has resigned from the company following differences with the government. Rai, whose term was till June 2017, has tendered his resignation, people familiar with the matter said. He joined IFCI in July 2007 after his predecessor R. M. Malla was elevated as chairman and managing director of SIDBI. Before joining IFCI, Rai, an IES officer, worked for over 20 years in various positions in the Government of India (GoI). He was re-appointed by the Board in June, 2012 for a period of five years. However, sources said the government was not happy with his performance. Rai could not be reached for his comments on the development. In October 2012, the government’s stake in the company rose to 55.57% following the conversion of debentures worth Rs923 crore that it held in IFCI into equity. Following the restructuring of shareholding, the government appointed two directors on the board. Since 2001, the government had been giving funds to IFCI to help it tide over financial problems. It initially gave Rs400 crore in the form of 20-year OCDs. In 2002-03, as part of the financial restructuring package of Rs5,220 crore, the government gave IFCI Rs523 crore as loan in the form of OCDs. However, the government stopped releasing funds after IFCI started making profits. The decision to go ahead with the conversion of OCDs into equity was taken by the committee of secretaries and the government had also taken exemption from Sebi for application of the takeover code. Shares of the IFCI closed at Rs26.20 per unit, down 2.24% on the BSE
After intense pressure from the finance ministry, Atul Kumar Rai has stepped down as chairman of the Industrial Finance Corporation of India (IFCI) -- one the country's oldest financial institutions, media reports said on Friday.
Rai took up the post in 2007 and was reappointed last year.
Rai was at loggerheads with the government over the state taking up control of IFCI last year and his fistfight with two other top company officials last month.
The ministry had tried to remove him from the post earlier too over charges of mismanagement.
Last September, the Supreme Court too had issued a notice to the government over Rai re-appointment after a petition alleged he was involved in corrupt practices.
In 2011, a parliamentary panel had sought a CBI probe into his appointment, saying he suppressed facts.
He was also close to Vinod Rai, the retired comptroller and auditor general (CAG), who shook up the UPA government citing massive losses to the exchequer in 2G spectrum and coal block allocations.
According to reports, the current chief of Industrial Development Bank of India (IDBI) R.M. Malla is likely to replace Atul Kumar Rai as he retires this month.
While Rai could not be reached for comment, a senior IFCIexecutive confirmed he put in his papers after the ministry asked him to do so. Ministry officials said he’d been asked to go.
In an interview with Business Standard last year, Rai, after being re-appointed by the company board for another five-year term, had said once the control of IFCI went into the hands of the government, it might go for a chief of its choice. Almost half the company’s independent directors stepped down from the board of IFCI after the government acquired majority stake in it around that time.
The immediate trigger for Rai’s being asked to go is reliably reported to be the retirement of Vinod Rai as Union comptroller and auditor-general. Finance ministry officials would not come on record on this. “We did not do anything so far, since it was thought the government was targeting the CAG through Atul Rai,” said one, on condition of anonymity.
Parliament’s Committee of Privileges had, some years before, questioned Atul Rai’s appointment. There was also a controversy when an MP had complained to the panel of Rai having allegedly misbehaved with him when he’d gone to the IFCI office in early 2010.
The government had been giving financial assistance to IFCI in the form of debentures from 2001 to 2007. Later, a committee headed by then Finance Secretary R S Gujral had been formed to look into certain issues. Subsequently, in August 2012, the Cabinet approved conversion of debentures worth Rs 923 crore that the government held in IFCI into shares at par. The government holding in the company rose to 55.57 per cent and it formally became a government-owned company, a tag it had not had for some time.
The Industrial Finance Corporation of India was established in 1948 as the first development financial institution in the country, to cater to the long-term financing needs of the industrial sector. After the reforms of the early 1990s, the constitution was changed in 1993 from a statutory corporation to a company. Subsequently, the name of the company was changed to IFCI Ltd.
Atul Kumar Rai, the CEO and managing director of state-owned financial institution IFCI, has resigned from the company following differences with the government. Rai, whose term was till June 2017, has tendered his resignation, people familiar with the matter said. He joined IFCI in July 2007 after his predecessor R. M. Malla was elevated as chairman and managing director of SIDBI. Before joining IFCI, Rai, an IES officer, worked for over 20 years in various positions in the Government of India (GoI). He was re-appointed by the Board in June, 2012 for a period of five years. However, sources said the government was not happy with his performance. Rai could not be reached for his comments on the development. In October 2012, the government’s stake in the company rose to 55.57% following the conversion of debentures worth Rs923 crore that it held in IFCI into equity. Following the restructuring of shareholding, the government appointed two directors on the board. Since 2001, the government had been giving funds to IFCI to help it tide over financial problems. It initially gave Rs400 crore in the form of 20-year OCDs. In 2002-03, as part of the financial restructuring package of Rs5,220 crore, the government gave IFCI Rs523 crore as loan in the form of OCDs. However, the government stopped releasing funds after IFCI started making profits. The decision to go ahead with the conversion of OCDs into equity was taken by the committee of secretaries and the government had also taken exemption from Sebi for application of the takeover code. Shares of the IFCI closed at Rs26.20 per unit, down 2.24% on the BSE
After intense pressure from the finance ministry, Atul Kumar Rai has stepped down as chairman of the Industrial Finance Corporation of India (IFCI) -- one the country's oldest financial institutions, media reports said on Friday.
Rai took up the post in 2007 and was reappointed last year.
Rai was at loggerheads with the government over the state taking up control of IFCI last year and his fistfight with two other top company officials last month.
The ministry had tried to remove him from the post earlier too over charges of mismanagement.
Last September, the Supreme Court too had issued a notice to the government over Rai re-appointment after a petition alleged he was involved in corrupt practices.
In 2011, a parliamentary panel had sought a CBI probe into his appointment, saying he suppressed facts.
He was also close to Vinod Rai, the retired comptroller and auditor general (CAG), who shook up the UPA government citing massive losses to the exchequer in 2G spectrum and coal block allocations.
According to reports, the current chief of Industrial Development Bank of India (IDBI) R.M. Malla is likely to replace Atul Kumar Rai as he retires this month.
FCI, the country’s oldest development financial institution, seems to have turned the corner as it has paid dividends after a decade. While tough times, including defaults, are a thing of the past, the institution is still trying to find a new business model. In an interview, IFCI Chief Executive Officer and Managing Director Atul Kumar Rai talks about his strategy and says he will try to keep the financial institution afloat without merging with another entity. Excerpts:
Have you heard from the government on conversion of bonds worth Rs 530 crore?
We have not received any information on what the government wants to do with the investment.
We have not received any information on what the government wants to do with the investment.
What is the road map for the revival of IFCI since the government investment was one of the issues raised by prospective strategic investors?
From our perspective, IFCI stands revived. There is no longer any deficiency in the institution. We have a very healthy capital adequacy ratio and, this year, we have paid dividend after 10 years. There is an issue as to which lines of business we should pursue. From the management side, we need to act depending on the situation. The stakeholders will have a point of view on the role to be adopted by the institution.
From our perspective, IFCI stands revived. There is no longer any deficiency in the institution. We have a very healthy capital adequacy ratio and, this year, we have paid dividend after 10 years. There is an issue as to which lines of business we should pursue. From the management side, we need to act depending on the situation. The stakeholders will have a point of view on the role to be adopted by the institution.
For almost a decade, you were absent from lending.
We have been lending for the last three years and we have created fresh assets of around Rs 3,000 crore each year. We have been lending at a reasonable margin that covers our cost of funds.
We have been lending for the last three years and we have created fresh assets of around Rs 3,000 crore each year. We have been lending at a reasonable margin that covers our cost of funds.
What is your cost of funds?
Our long-term cost of funds is around 9 per cent. This is very good for an entity which neither has sovereign backing nor is a bank.
Our long-term cost of funds is around 9 per cent. This is very good for an entity which neither has sovereign backing nor is a bank.
But won’t the cost of funds limit your ability to grow?
For us, the crucial business aspect is that we have begun to grow our balance sheet, which was shrinking for several years. We are avoiding ambitious growth. Given the past experience, we have taken a conscious decision to keep our maximum exposure at Rs 150 crore, while the minimum, which was Rs 50 crore, is being enhanced to Rs 100 crore. We may increase the upper limit to Rs 200 crore.
For us, the crucial business aspect is that we have begun to grow our balance sheet, which was shrinking for several years. We are avoiding ambitious growth. Given the past experience, we have taken a conscious decision to keep our maximum exposure at Rs 150 crore, while the minimum, which was Rs 50 crore, is being enhanced to Rs 100 crore. We may increase the upper limit to Rs 200 crore.
But is this a sustainable model?
Given the scarce human resources, we do not want to lend aggressively. Maybe we are not represented in the biggest projects, but that’s a call that we need to take because we cannot have the cost of funds of a bank. For instance, during times of market volatility, you can use the shyness of other people to your advantage, earn good returns, and then exit. Given our experience in dealing with various sectors and mid-corporates, we can tap the potential in this.
Given the scarce human resources, we do not want to lend aggressively. Maybe we are not represented in the biggest projects, but that’s a call that we need to take because we cannot have the cost of funds of a bank. For instance, during times of market volatility, you can use the shyness of other people to your advantage, earn good returns, and then exit. Given our experience in dealing with various sectors and mid-corporates, we can tap the potential in this.
Can that be your long-term strategy?
Straight-forward banking is something we cannot do since we raise funds from the secondary market. We can look at sectors where banks have an issue.
Straight-forward banking is something we cannot do since we raise funds from the secondary market. We can look at sectors where banks have an issue.
Won’t these sectors be riskier as well?
That is one way to look at it. We have a higher cost of funds and that needs to be recognised. So, we have to define the risk profile that we want to go for. You have to earn 2.5-3 per cent margin. But at times the margin can be 4-5 per cent, as is the case now. Banks may not be willing to enter at every stage. So, we can enter at, say, the stage before a power project achieves financial closure and exit a year after the financial closure is achieved. This way, the returns will be higher. IFCI cannot manage risks across sectors, but given its expertise in roads and power, it can use this to our advantage. Here, you can do part-equity, part-debt and go for mezzanine or take-out finance. Basically, you can use a lot of gaps to leverage returns.
That is one way to look at it. We have a higher cost of funds and that needs to be recognised. So, we have to define the risk profile that we want to go for. You have to earn 2.5-3 per cent margin. But at times the margin can be 4-5 per cent, as is the case now. Banks may not be willing to enter at every stage. So, we can enter at, say, the stage before a power project achieves financial closure and exit a year after the financial closure is achieved. This way, the returns will be higher. IFCI cannot manage risks across sectors, but given its expertise in roads and power, it can use this to our advantage. Here, you can do part-equity, part-debt and go for mezzanine or take-out finance. Basically, you can use a lot of gaps to leverage returns.
What is the status of your investment in Tata Motors’ differential voting right shares and Hindalco shares?
We are sitting on some decent profits. We have sold some of the Tata shares and we will make some more profit on the shares that we are left with.
We are sitting on some decent profits. We have sold some of the Tata shares and we will make some more profit on the shares that we are left with.
The government has once again started talks of consolidation of public sector banks. Is it also the time to revisit the issue of IFCI’s merger with a bank?
The option is always there since we have a public sector character. But this has been tried before. Several suitors were approached, but it was not possible to merge then. Valuations and other issues, that can make the merger a success or failure, would need to be factored in before taking a decision.
The option is always there since we have a public sector character. But this has been tried before. Several suitors were approached, but it was not possible to merge then. Valuations and other issues, that can make the merger a success or failure, would need to be factored in before taking a decision.
From the management’s perspective, we want to do a good job so that IFCI can stand firm on its own feet.
There were certain issues about your investment in MCX-SX.
We have invested 5 per cent on the basis of an approval from our board. It is a long-term investment where you cannot expect to earn a return overnight.
We have invested 5 per cent on the basis of an approval from our board. It is a long-term investment where you cannot expect to earn a return overnight.
So, what happens to your investment in the National Stock Exchange?
In line with the regulatory requirement, we have reduced our holding to above 4 per cent. Now, it is a function of treasury.
In line with the regulatory requirement, we have reduced our holding to above 4 per cent. Now, it is a function of treasury.
इंडस्ट्रियल फाइनैंस कॉर्पोरेशन ऑफ इंडिया(आईएफसीआई) के मैनेजिंग डायरेक्टर और सीईओ अतुल राय को पूर्व कैग प्रमुख विनोद राय से दोस्ती महंगी पड़ी। खबर है कि अतुल राय ने गुरुवार को सरकार के प्रेशर में आईएफसीआई के मैनेजिंग डायरेक्टर पद से इस्तीफा दे दिया। हालंकि इस बात की चर्चा पहले से ही थी कि विनोद राय के रिटायर होते ही अतुल राय का भी पत्ता साफ कर दिया जाएगा। सूत्रों ने हमारे सहयोगी अखबार टाइम्स ऑफ इंडिया को बताया कि अतुल राय ने गुरुवार सुबह वित्त मंत्रालय के अधिकारियों से मिलकर अपना इस्तीफा सौंप दिया।
इसके पहले विनोद राय और अतुल राय ने वित्त मंत्रालय में साथ काम किया था। कैग प्रमुख बनने के पहले विनोद राय वित्त मंत्रालय में जॉइंट सेक्रेटरी थे। वहीं अतुल राय डायरेक्टर थे और विनोद राय को रिपोर्ट करते थे। अतुल राय ने 2007 में आईएफसीआई जॉइन किया था। 2012 में इन्हें उसके बोर्ड में नियुक्ति मिली। यदि राय से इस्तीफा नहीं लिया जाता तो इनका कार्यकाल 2017 में खत्म होता। वित्त मंत्रालय के अधिकारी साफ तौर पर कहते थे कि अतुल राय को कैग प्रमुख विनोद राय के हटते ही इस्तीफा देना होगा।
वास्तव में वित्त मंत्रालय ने दो साल पहले पहली बार जब अतुल राय की नियुक्ति के लिए इशू जारी किया था तब कैग की रिपोर्ट से यूपीए सरकार परेशान थी। टूजी स्पेक्ट्रम आवंटन और कोलगेट के साथ ऑइल-गैस अप्रूवल में अनियमितता पर कैग की रिपोर्ट आ चुकी थी। बाद में सरकार ने आईएफसीआई के ज्यादातर स्टेक अपने कब्जे में ले लिया। कुछ ही हफ्तों में सरकार ने एक बार फिर से बोर्ड का गठन किया लेकिन एमडी और सीईओ पद में कोई बदलाव नहीं किया था।
इसके पहले विनोद राय और अतुल राय ने वित्त मंत्रालय में साथ काम किया था। कैग प्रमुख बनने के पहले विनोद राय वित्त मंत्रालय में जॉइंट सेक्रेटरी थे। वहीं अतुल राय डायरेक्टर थे और विनोद राय को रिपोर्ट करते थे। अतुल राय ने 2007 में आईएफसीआई जॉइन किया था। 2012 में इन्हें उसके बोर्ड में नियुक्ति मिली। यदि राय से इस्तीफा नहीं लिया जाता तो इनका कार्यकाल 2017 में खत्म होता। वित्त मंत्रालय के अधिकारी साफ तौर पर कहते थे कि अतुल राय को कैग प्रमुख विनोद राय के हटते ही इस्तीफा देना होगा।
वास्तव में वित्त मंत्रालय ने दो साल पहले पहली बार जब अतुल राय की नियुक्ति के लिए इशू जारी किया था तब कैग की रिपोर्ट से यूपीए सरकार परेशान थी। टूजी स्पेक्ट्रम आवंटन और कोलगेट के साथ ऑइल-गैस अप्रूवल में अनियमितता पर कैग की रिपोर्ट आ चुकी थी। बाद में सरकार ने आईएफसीआई के ज्यादातर स्टेक अपने कब्जे में ले लिया। कुछ ही हफ्तों में सरकार ने एक बार फिर से बोर्ड का गठन किया लेकिन एमडी और सीईओ पद में कोई बदलाव नहीं किया था।
posted by Vishal Tiwari @ 22:41
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