PSU brass to be barred from joining rivals

The draft code,finalised recently by the PESB,will now be considered by a committee set up by the Department of Public Enterprises (DPE). The committee is likely to submit a report in three months,sources told The Indian Express. The PESB has said the code must be adopted by all central PSUs without exception.

As per the present guidelines,directors on PSU boards are prohibited only from joining a firm with which the PSU has had a business relationship for two years after they quit or retire. But they can join competitors. For instance,Naresh Naiyyar,ex-director of Indian Oil Corporation joined Essar Oil Ltd as a CEO and P Raghvendran,again from IOC,took over as president of RILs refinery business without attracting any attention.

The government must have taken note of a slowly rising trend of PSU directors joining rivals in the private sector. The new code is an attempt to plug this loophole, said a PSU chief. The code broadly lays down the dos and donts for PSU employees in their conduct while dealing with the government,competitors and other stakeholders. Besides,it also elaborates on how top executives in PSUs must respond when faced with a conflict of interest.

While employees should avoid making any outside investments that could impact the PSU,they are also expected to make relevant disclosure beforehand for business purpose with a relative or a public limited firm in which he or his relative holds 2 per cent or more shares.

In their dealings with the government,the Code specifies that corporate funds,credit,property or services of the PSUs must not be used,directly or indirectly,to support any political party or candidate,or any ballot measure,without the prior approval of the PSUs board.

As regard business and financial records of PSUs,the employees are expected to ensure accuracy in records with full and fair disclosures.