SB Nayar named IIFCL chief despite Finance Minister P Chidambaram objections

NEW DELHI: The Appointments Committee of the Cabinet, chaired by Prime Minister Manmohan Singh, has decided to appoint SB Nayar as the chairman and managing director of India Infrastructure Finance Company ( IIFCL).

The decision comes in spite of Union finance minister P Chidambaram backing Deepak Bagla, a partner with London-based private equity firm 3i, for the top job at the state-run financier. “The Appointments Committee of the Cabinet has cleared Nayar’s name and its notification will soon be issued,” an official aware of the development told ET.

A second official confirmed the development. Nayar is currently the MD and chief executive officer of IIFCL, another state-run finance firm. He has also served as deputy managing director at State Bank of India.

In a letter to the PM this August, Chidambaram had said that the Appointments Committee of the Cabinet must “reconsider” Deepak Bagla for the IIFCL top boss post, saying the “conflict of interests” cited by the appointments committee to turn down Bagla did not exist. But the appointments committee has ignored his defence of Bagla and chose to go ahead with Nayar.

The decision comes at a time when the authority of the Prime Minister is being questioned by the opposition parties after the recent standoff on the controversial ordinance concerning convicted MPs and MLAs.

The ordinance was dropped by the Cabinet after Rahul Gandhi told reporters that the ordinance was “complete nonsense” and it should be “torn up and thrown away”. Chidambaram’s letter to the Prime Minister was triggered by a missive from the Department of Personnel & Training (DoPT) directing the finance ministry to process Nayar’s appointment on July 24.

Denying the perceived conflict of interest because of the memorandum of understanding signed between 3i Venture Fund, where Bagla worked as partner, and IIFCL, the finance minister said the matter of the MoU, and thereby the likely conflict of interest, has already been looked into.

Further, IIFCL has not carried out any transaction with 3i Venture. Also, the memorandum had already become infructuous because five years had lapsed since its signing, he said.