Two former bureaucrats, a retired IPS officer and the former president of Institute of Companies Secretaries of India, who were appointed by the UPA government on the board of Indian Oil Corporation as independent directors on March 20, 2014, have been removed from the board of the company.
This came as a result of the government’s decision to cancel appointments done by the previous government and that shareholders should not ratify those selections at the annual general meeting.
In an announcement to the stock exchanges, Indian Oil Corporation, India’s largest company by revenues, said, “K Jairaj, Nesar Ahmad, Sunil Krishna and Sayan Chatterjee have ceased to be independent directors on the board of the company on August 27, 2014.”
While the four directors were appointed in March for a three-year term, their appointments were due to be confirmed by the shareholders on at its annual general meeting on Wednesday which did not happen thereby leading to their cessation.
The Indian Express had earlier reported that in a meeting held by the additional principal secretary it was decided to cancel previous selections through a directive so that the Appointments Committee of Cabinet (ACC), which consists of the Prime Minister and the home minister, could quickly approve fresh names for appointment by September-end.
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The government’s earlier strategy was that past selections should not be ratified by shareholders at the AGM so that the selected persons would have to discontinue.
Among the two bureaucrats in the list — Jairaj was a member of 1976 batch of the IAS and retired as the additional chief secretary in the Karnataka government and Sayan Chatterjee (1975 batch IAS officer) was the former secretary, Department of Aids Control.
Sunil Krishna (1973 batch IPS officer) was the former director general of the National Human Rights Commission and was earlier director-vigilance in the UP government.
Nesar Ahmed was the president of ICSI in 2012 and continues as a member of the central council of the institute.
It is expected that appointments of independent directors made by other Central public sector enterprises (CPSEs) on their board under the previous government would also not come for ratification at the AGM.
New corporate governance norms that kick off from October 1 require at least one-third of the board should comprise independent directors where the Board chairman is a non-executive director and at least half of the board in case the company doesn’t have a regular non-executive chairman.