Despite Companies Act mandate, 34 Central PSUs function without CEOs

Decision of the concerned administrative ministry to keep a particular post in abeyance in several of these cases has lead to prolonged delays.

MMTC Ltd, a frontline state-owned trading company that is listed on the bourses and has public shareholders, is operating without a full-time chairman and managing director for almost the last four years, ever since the vacancy arose at the helm on October 1, 2010.

The trading firm is no exception. The posts of chief executives were vacant in 33 other state-owned firms as on July 15, including Coal India Ltd, a public sector company with a market capitalisation of over Rs 2,42,000 crore (as on August 1), BSNL, NHPC and railway unit IRCTC.

Reasons include the scrapping of recommended panel of candidates by the government, delays in obtaining vigilance clearance or approval of competent authority and court cases filed by those lower down in the empanelment process.

In addition, the decision of the concerned administrative ministry to keep a particular post in abeyance in several of these cases has lead to prolonged delays.

In its intervention against large-scale vacancies at the helm of PSUs, the Centre has readied a computerised monitoring system to track the processing of appointments to the Board level posts in Central Public Sector Enterprises (CPSEs) to tackle the festering problem. Another software has been developed to monitor the processing of proposals before the Appointments Committee of the Cabinet.

The interesting aspect is that under the new Companies Act 2013, delays in appointments at the helm of companies are in violations of the provisions of the legislation. Appointment of key managerial personnel, which includes a managing director (MD), chairman or chairman-cum-managing director (CMD), is central to the enforcement of corporate governance norms as provided in the new Companies Act, 2013.

In the earlier Companies Act 1956, an exemption was made for government companies, which were exempted through a notification of January 1978 on the specific clause of having a full-time person at the helm (MD or whole-time director or manager).

Story continues below this ad

The CMD’s post is lying vacant in ONGC Videsh, Power Finance Corporation, Hindustan Photo Films Manufacturing Company, Hooghly Dock and Port Engineers, MTNL, and Hindustan Cables, according to data from the department of public enterprises updated till July 15.

The MD post is vacant in HMT Chinar Watches (since January 2009), Ferro Scrap Nigam, Dedicated Freight Corridor Corporation of India, Central Cottage Industries Corporation of India, among others.

Anil Sasi

Anil Sasi is the National Business Editor at The Indian Express, where he steers the newspaper’s coverage of the Indian economy, corporate affairs, and financial policy. As a senior editor, he plays a pivotal role in shaping the narrative around India's business landscape. Professional Experience Sasi brings extensive experience from some of India’s most respected financial dailies. Prior to his leadership role at The Indian Express, he worked with: The Hindu Business Line Business Standard His career trajectory across these premier publications demonstrates a consistent track record of rigorous financial reporting and editorial oversight. Expertise & Focus With a deep understanding of market dynamics and policy interventions, Sasi writes authoritatively on: Macroeconomics: Analysis of fiscal policy, budgets, and economic trends. Corporate Affairs: In-depth coverage of India's major industries and corporate governance. Business Policy: The intersection of government regulation and private enterprise. Education Anil Sasi is an alumnus of the prestigious Delhi University, providing a strong academic foundation to his journalistic work. Find all stories by Anil Sasi here ... Read More