During the UPA regime, a number of public sector undertakings, notably a host of banks, came under the scanner for appointing as independent directors their party faithful. Earlier this week, appointments cleared by the NDA’s Appointments Committee of the Cabinet (ACC) include those of at least 10 politicians affiliated with the ruling BJP as independent directors on the boards of top public sector companies.
These include party’s Delhi unit vice president Shazia Ilmi; Gujarat IT cell convenor Rajika Kacheria; minority face of the BJP in Gujarat Asifa Khan; former BJP MLA candidate from Odisha Surama Padhy and former Bihar MLC Kiran Ghai Sinha.
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They find themselves on the boards of Navaratna PSUs that include Engineers India Ltd (EIL), Hindustan Petroleum Corporation Ltd (HPCL), Bharat Heavy Electricals Ltd (BHEL) and the National Aluminium Company Ltd (NALCO).
In 2014, the Securities and Exchange Board of India (Sebi) had made amendments to Clause 49 of the listing agreement for all companies, stipulating that a board should have at least 50 per cent of directors as non-executive or independent directors with at least one woman director.
Ilmi, a mass communication postgraduate from Jamia Millia Islamia University, has been appointed as an independent director in Engineers India Ltd (EIL). Kacheria, a cosmetologist, has been appointed as independent director of the Cotton Corporation of India Ltd. Sinha, who has also served on the local board of the Reserve Bank in Bihar, has been appointed an independent director of NALCO.
Another prominent name who figures in the list of appointees is that of Asifa Khan, who will serve on the board of HPCL. A post-graduate in English literature, Khan is a teacher-turned-politician, who was groomed in politics by Congress leader Ahmed Patel but has now become a popular minority face for BJP.
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Bharatsinh Prabhatsinh Parmar, a former Rajya Sabha MP, has been appointed on the board of State Trading Corporation. Parmar, who is currently state general secretary for the Gujarat BJP, confirmed his appointment when contacted. Former MLA candidate from Odisha Surama Padhy, who will join the BHEL board, has a law degree, according to her affidavit filed with the Election Commission before the 2014 state Assembly polls.
Other BJP affiliates among the appointees include the party’s Karnataka unit secretary Bharathi Magdum, who has also been appointed on the STC board.
BJP’s Andhra Pradesh unit Mahila Morcha head Sarnala Malathi Rani has been appointed as an independent director of Export Credit Guarantee Corporation Ltd (ECGC), a PSU under the Ministry of Commerce and Industry. Sipra Goon, who contested the 2016 Assam state elections for BJP, has been selected as independent director of Andrew Yule & Company Ltd. Shikha Roy, a former BJP candidate from Kasturba Nagar constituency in Delhi, has been appointed on board of National Handloom Development Corporation Ltd.
These PSUs were reached on phone and e-mail but those who replied said they had not received any official communication regarding the appointment of independent directors. Attempts were made to reach Ilmi, a former Aam Aadmi Party leader, on her phone, but it was answered by her executive assistant Sagar Sethi who said that the Delhi BJP vice-president was in Dubai. An e-mail sent to her got no response.
When contacted, Kacheria said that while no official communication was made to her, she was verbally informed about her appointment. “We have been continuously in meetings. I was just asked to mail my bio-data which I did. I sent that (bio-data) almost two months back, and then they made me sign a couple of formats, and about two days back I was told that I am a part of this thing,” she said. She added that she has been associated with the BJP for over 10 years.
Like Kacheria, even Sinha, who retired as the Member of Legislative Council of Bihar in July 2016, said she had not been officially informed but has been asked for information regarding any office of profit held by her.
Malathi Rani, with whom The Indian Express spoke to on the phone, confirmed her appointment on the board of ECGC. “It is confirmed. Already I have sent my acceptance to the government, but we are waiting for the Board of Directors meeting. I am waiting for first week of February, I have already met Mininster Sitharamanji (Commerce Minister Nirmala Sitharaman) already,” she said.
“My state president Hari Babu ji (K Hari Babu), he requested to Ram Lal ji and other national president. I am, (for the) last 22 years a very sincere karyakarta in party, and (have taken) liabilities like state secretary, mahila morcha state president third time,” Malathi Rani said, adding that she has a degree in industrial relations and business management.
Messages sent to Shikha Roy, Surama Padhy, Asifa Khan, and Sipra Goon went unanswered. Bharathi Magdum could not be reached.
A total of 83 names were cleared by ACC for PSUs under 14 ministries and departments that included oil, steel, heavy industries, textile, railways, coal, power, water resources, health, mines, medium and small enterprises, commerce, chemicals & petrochemicals, and food & public distribution. The other appointees include retired IAS officers, former heads of state-owned companies, and academicians from institutes like IITs and IIMs.
The process for appointment of an independent director to a public sector company’s board is similar to that for a functional director of such entities. The proposals for the appointment of independent (non-official) Directors are required to be initiated by the Administrative Ministries concerned and submitted to Department of Public Enterprises (DPE). These proposals are processed in DPE and placed for consideration of the Search Committee. The committee scrutinises the list and finally recommends the name/names to the nodal ministry, which then approaches the ACC, chaired by the Prime Minister, for the final notification.
The UPA regime, too, had tapped its leaders. C R Naseer Ahamed, a district Congress vice-president in Davangere, was appointed as a director on the board of Syndicate Bank in February 2013. Jagdish Raj Shrimali who served on the board of Syndicate Bank till July 28, 2014 had also been an active Congress worker. Union Bank of India appointed Anusuiya Sharma, an AICC member, on its board while the Corporation Bank board has Bonam Venkata Bhaskar, joint secretary of the Andhra Pradesh Congress Committee. The Allahabad Bank board had Ajay Shukla, a member of the UP Congress Committee. Shukla was appointed in August 2013.
In March 2014, when the United Bank of India came under the scanner for its rising NPAs, The Indian Express had reported that over the previous four years, the bank had appointed a politician, a media manager and a businessman on its board. Of them Srenik Sett, who served on the board for three years between October 6, 2010 and October 5, 2013, was the campaign manager for former finance minister Pranab Mukherjee in the 2009 Lok Sabha elections.