The Ministry of Education (MoE) is learned to have written to the Indian Institute of Management (IIM), Rohtak, flagging objections of its Internal Audit Wing (IAW) regarding a variable pay of Rs 3.2 crore paid by the institute to its director, Dheeraj Sharma, for three years — 2018-19, 2019-20 and 2020-21. The IAW was tasked by the MoE to investigate a set of complaints against the institute that had been received by President Droupadi Murmu, in her capacity as Visitor of all IIMs, which she forwarded to the government on October 6, 2023. These included complaints of variable pay of the IIM Rohtak director, irregular issuance of mobile phones to faculty, and allegations of financial irregularities. The IAW found that the procedure adopted by the institute for the payment of variable pay is “void” and that the amount paid is significantly more than Sharma’s fixed salary, which goes against “financial prudence”. The IAW emphasised that “propriety of any system allows variable pay to be a percentage of a person's total emoluments”, and not 100% or 200%. “In this case, the variable pay is more than 200% of the Director’s total emoluments,” the IAW noted in its report to the ministry. The ministry has written twice to the institute seeking its response on the IAW’s findings, specifically asking for information on the “computational procedure followed to arrive at the amount of variable pay”. It has also asked IIM Rohtak to identify the persons and officers involved in the decision, take appropriate action, and outline what it is doing to limit the director’s variable pay and its plans to recover the excess amount paid. Directors of IIMs, apart from their fixed pay, have a variable component as well, which can be decided based on some predetermined performance parameters. Under the IIM Act, an institute’s Board of Governors has the power to decide this as per the performance objectives defined in each institute’s regulations notified under the Act and Rules. The first letter by MoE was written to the institute in April. The institute is learned to have replied to the government denying any violation saying the compensation was approved by its Board of Governors. The ministry is learnt to have written to the institute again last month seeking specific responses to IAW’s findings pertaining to variable pay and other matters. In a response to an email from The Indian Express seeking comment on the findings of the IAW, the institute denied that there was an inquiry conducted by the MoE related to Sharma’s variable pay. It further said that the variable pay paid to Sharma was done as per the IIM Act and paid only after IIM Rohtak’s Regulations under the IIM Act and Rules were notified. “The payment of variable pay for the year 2018-19, 2019-20 and 2020-21 was approved by the board with complete consensus of all the attendee board members (more than ten members). The information related to the variable pay to the Director, IIM Rohtak, was also shared with the ministry via email nearly one-and-a-half years ago. As such, there is no violation of any kind,” the institute's secretary to the Board of Governors told The Indian Express in an email. The board secretary further added that the matter “has been duly examined by CAG and CAG has found no irregularity”. The IAW, in its report to the ministry, has objected to the variable pay on three grounds. First, the institute’s Board of Governors approved Sharma’s variable pay for 2018-19 and 2019-20 in its 45th meeting held on December 11, 2020 and for 2020-21 in its 48th meeting on September 25, 2021. This decision was approved before the institute's Regulations under the IIM Act and Rules came into effect on October 25, 2021. “Hence, the entire procedure adopted for payment of variable pay to the director for the years 2018-19, 2019-20 and 2020-21 is void as the variable pay was approved prior to the date of notifications of regulations,” the IAW wrote in its report to MoE. Second, the board has included the financial health of the institute as one of the performance parameters based on which the director's variable pay would be decided. However, the IAW found that the “financial health of the institute was irrationally inflated by adding unspent grants-in-aid and the interest earned thereon into the corpus fund of the institute.” Third, the IAW objected to Sharma’s variable pay being more than 200% of his total emoluments. Significantly, Sharma is already under government scrutiny for allegedly misrepresenting his educational qualifications to secure his initial term as IIM Rohtak’s director in 2017. The job required a first-class Bachelor’s degree, but he had obtained a second division at the undergraduate level. The government acknowledged this discrepancy in the Punjab and Haryana High Court in March 2022, only after he completed his first term. Despite objections from the ministry representative on the institute’s BoG due to revelations about his academic credentials, Sharma was reappointed for a second term as the institute’s head by the board in February 2022. The President’s reference to MoE pertaining to IIM Rohtak, in her capacity as the Visitor of all IIMs, was sent to the ministry on October 6, 2023 and it was then sent to the IAW on January 8 this year.
