Coal India Limited is not only without a chairman after Narsing Rao quit in May, it also has no full-time chiefs for two of its most profitable subsidiaries — South Eastern Coalfields Limited (SECL) and Northern Coalfields Limited (NCL) for the past two years.
Worse, both the former incumbents were removed after the CBI began inquiries against them.
On a day when Credit Suisse downgraded Coal India Limited (CIL) to “neutral” from “outperform” saying CIL “is cheap no longer” while noting “it is difficult to see volumes improving within 3-4 years”, the crisis at the management level in these companies is massive.
For both posts at SECL and NCL, two board-level officers of CIL had wanted to join but were stopped by the coal ministry as it would have created problems in the composition of the board of the holding company.
SECL has the distinction of being the highest coal producing subsidiary of CIL.
However, it is functioning not only without a CMD, but also without director (project and planning) who runs the critical mining operations of the company. The chief’s post has been vacant since the CBI filed a chargesheet against MP Dixit for alleged graft in December 2011. In the absence of a full-time CMD, the coal ministry had allowed CIL to depute its director technical N Kumar to function as the acting CMD, an arrangement that continues till date.
Similarly, Singrauli-headquartered NCL’s director personnel Shantilata Sahoo has been functioning as the company’s acting CMD. Its previous boss, VK Singh, was booked by the CBI for alleged corruption in 2011, but subsequently the agency is learnt to have given him a clean chit.
CIL has six coal mining subsidiaries and a research organisation, CMPDL. Of these, BCCL and Eastern Coalfields have been incurring losses for past several years.
CIL has reported flat production for three years and recorded a modest 3 per cent rise in output in FY14.
The shortfall has forced India to import 89 million tonnes of coal in FY14 despite having the largest reserves in the world.
Filling in these posts will be crucial for for the Modi government to ensure coal production in the economy turns around.