Govt now plans to sack independent directors of all oil navratna PSUs

ONGC isn’t the only PSU the Government is interfering with and its chief Subir Raha is not the only one who may have to head for the ex...

ONGC isn’t the only PSU the Government is interfering with and its chief Subir Raha is not the only one who may have to head for the exit door. The Petroleum Ministry now plans to evict all independent directors—appointed by the NDA government—from the board of the five oil navratnas at their next annual general meetings (AGM).

These range from an IIM director to CII president, former heads of ONGC and Pepsi India to the former Railway Board chairman.

‘‘Perhaps, advantage may be taken of the impending AGM of these companies to move official resolution for non-continuance of these directors for creating additional space for new set of directors in ONGC, GAIL, IOC, HPCL and BPCL,’’ says an official note from Petroleum Secretary S C Tripathi to Union Petroleum Minister Mani Shankar Aiyar.

Story continues below this ad

This came just three days after Aiyar, in a meeting on August 15, had directed Tripathi to fill existing vacancies of independent directors ‘‘in accordance with the directions given by him’’ and that it would be necessary to decide whether to continue or not with the independent directors appointed before January 2004.

Because of their navratna status—and the autonomy that it comes with—these five PSUs have independent or non-functional directors who are experts in their field and are selected out of a list of prominent professionals and eminent personalities.

All these directors were appointed, as per norms, by the Appointments Committee of the Cabinet from a panel of names forwarded by the Public Enterprise Selection Board.

In the list prepared by the ministry (see box) except for four independent directors on the board of Hindustan Petroleum Corp, the remaining 14 have at least one year left before their three-year tenure comes to an end.

Story continues below this ad

To get over this, Tripathi has asked the Law Ministry on “how to move a resolution to terminate the services of a director who may not be retiring in terms of one-third directors retiring under the general formulation of the Companies Act.’’

The same Law Ministry has been asked to give an opinion on how a resolution could be moved at the September 21 AGM of the Oil & Natural Gas Corp to induct two more government directors on the board of India’s largest oil company.

As first reported in The Indian Express, Raha has threatened to resign if the resolution to add oil regulator V K Sibal and Special Secretary M S Srinivasan to the ONGC board is moved and accepted at the AGM.

Independent directors whose term not yet over:

		• ONGC: All appointed Sept 11, 2003 U Sundararajan, Former CMD, BPCL Rajesh V Shah, Industrialist, Mukund Steel M M Chitale, Renowned CA • GAIL (India): All appointed August 26, 2003 B C Bora, ex-CMD, ONGC Amit Mitra, Chairman, FICCI A K Kundra, Former Bureaucrat • Indian Oil Corp: All appointed August 13, 2003 Vineet Nayyar, CEO, Mahindra BT, ex-CMD GAIL S K Barua, Professor, IIM Ahmedabad V K Agarwal, ex-Chairman, Railway Board P M Sinha, ex-CEO, Pepsi India V Ranganathan, Former Chief Secretary, Maharashtra • Bharat Petroleum Corp: All appointed August 27, 2003 B D Gupta, Former Chairman, Railway Board P C Sen, ex-CMD, Indian Airlines A H Kalro, Director, IIM Kozhikode