MUMBAI: In the IL&FS bankruptcy , the blame game appears to have just begun. Many members of the ousted board at the troubled financier are pointing fingers at the government’s alleged discriminatory actions and apparent indecisiveness of dominant shareholders for the biggest blow-up in the Indian financial services industry.Life Insurance Corp of India, as the biggest shareholder at IL&FS, has come in for a particularly pointed criticism from former independent directors on the board of the infrastructure lender. At least four directors ET spoke with blamed the life insurer and questioned why the nominee directors were left out of the petition filed by the government seeking to supersede the board when they have more responsibility in safeguarding their stakeholders’ money.“LIC had two board members on ILFS,’’ said one of the directors. “Before the collapse, they should have taken precautionary measures as, technically, LIC was not just an owner of the company but was the largest shareholder of the company,” he said, requesting anonymity.There were six nominee directors and five independent directors on the board. LIC’s managing director Hemant Bhargava quit from the board of IL&FS on September 29. Earlier in September, he had stepped down as non-executive chairman. He took over as non-executive chairman in July after Ravi Parthasarathy had resigned from the board in July 2018.Praveen Kumar Molri is LIC’s nominee now. The National Company Law Tribunal ( NCLT ) on Monday ruled that the government can appoint six directors, including Uday Kotak , and replace the existing members of the board. This comes after IL&FS began to serially default on its bonds and deposits. It owes more than Rs 91,000 crore through scores of its subsidiaries. Its financial woes are partly self-inflicted, and partly due to government regulations and shareholder indifference.“This (the financial position) was not a revelation to LIC. As a shareholder it was clearly aware of the crisis building over a period of time,’’ said the second person cited above. “It neither behaved as a shareholder nor a promoter.’’ IL&FS’ bankruptcy just did not happen overnight, but was building up for more than four years as projects got entangled in litigation and cost over-runs began to pinch. To add to its misery, equity investments were also stalled for reasons that in hindsight look unreasonable.With public sector banks calling a halt to refinancing infrastructure projects since 2016, funds dried up even as its reticent shareholders scuttled IPOs plans and buyers began putting up tough conditions on asset sales. Even a big potential domestic buyer was shown the door.“Piramal’s offer to buy IL&FS fell through only because LIC opposed it,” said an independent director on the board. “They wanted Rs 1,150 a share against Piramal’s offer of Rs 750 a share. This was agreed upon after six months of negotiations. LIC nominee insisted that this should be recorded in the minutes.”Manish Jain, partner at JLJ Law Offices, said that as a shareholder, LIC is the custodian of public money and has a moral duty to apply its mind judiciously to what is required to save an institution. “The promoter or a shareholder designation does not matter in a situation like this, at least when there were two LIC nominees on board.”The government petition has named Hari Sankaran, Arun K Saha, Sunil Behari Mathur, Ravindran Chandra Bhargava, Michael Philip Pinto, Jaithirth Rao, Rina Kamath, Ravi Ramaswamy Parthasarthy, M Manohar Waghle and Varsha Shivaji Sawant. The petition has left out Praveen Kumar Molri, nominee director of LIC, Kiyoshi Fushitani and Harukazu Yamaguchi, nominee directors of Orix Corporation, Japan, Sanjeev Doshi nominee director, Abu Dhabi Investment Authority , Bijendra Kumar Singhal, nominee director Central Bank of India, and Chalasani Venkat Nageswar, nominee director State Bank of India.“Under the companies’ Act, there is no difference between a nominee director and an independent director,” said another director named in the petition. “If dressing up of accounts is an issue, institutional investors know more than others as they are also shareholders of the company. The proposals are presented to them and approved by them before they are brought to the board.”