March 11, 2016 1:43:28 am
Vijay Mallya, chairman of the UB Group, may have left the country, leaving a string of banks, regulators and the judiciary in hot pursuit but the Indian subsidiaries of two large multinational corporations, French pharma major Sanofi and German chemicals conglomerate Bayer, continue to have him as the chairman on their board of directors. Mallya is the chairman of Bayer Crop Science Ltd and Sanofi India Ltd, both listed on Indian stock exchanges.
The spokesperson for Bayer Group in India, in an email response to The Indian Express, said, “Bayer will not comment on this topic.”
The spokesperson for Sanofi India Limited said: “We have been advised that Dr. Mallya has not been disqualified under the Indian Companies Act, to hold a Board position in our Company or any other company. The legal cases do not relate to Sanofi India Limited and hence we have no further comments on this subject.”
Mallya has been declared a “wilful defaulter” by several public sector banks, including the State Bank of India, as he owes over Rs 7,000 crore to a consortium of banks.
On Thursday, in the Supreme Court, Attorney General Mukul Rohatgi confirmed that Mallya had left the country on March 2, the day an application was moved before the Debts Recovery Tribunal for impounding his passport. “He has tremendous assets in the UK. So in all likelihood, he should be there. He has also been tweeting from there and says he is not an absconder. So he should be called here,” Rohatgi said.
The development comes even as the Indian corporate world saw a more stringent Companies Act, 2013, being passed by the Parliament in August 2013 and numerous debates on corporate governance and quality of independent directors on company’s board. Experts, however, say corporate governance in India is mostly practised in letter and not in spirit.
While Section 169 (1) of The Companies Act, 2013 says that, “a company may, by ordinary resolution, remove a director, not being a director appointed by the Tribunal under section 242, before the expiry of the period of his office after giving him a reasonable opportunity of being heard”, market experts point to this being a rare practice in India.
“In India, it is not a common practice to remove a director by board resolution. The general practice is to convince the person in a private discussion to resign citing personal reason,” a leading company law expert said.
Prithvi Haldea of Prime Database said there is an issue of ethics involved but legally the person cannot be removed just on the basis of a complaint or chargesheet. “It has more to do with ethics and there is an ethical issue in this case. While laws need to be made more stringent, their implementation should also be strict,” said Haldea.
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