Why PSU boards are dream destination for politicians

And the demand could be shifting a project to their constituency, getting the PSU to fund social development projects in their home towns or getting officers transferred and promoted.

‘‘We are already getting letters for laying pipelines through their constituency even though there is not much (gas) demand along that route,’’ said a GAIL (India) official.

Oil marketing companies such as Indian Oil Corp receives VIP references— read political requests—for transferring or holding back transfers of its officials. As many as 20 Congress leaders—from ex-MLAs to state unit chiefs—were being foisted onto the boards of oil PSUs as independent directors while throwing out most of the technocrats suggested by the Department of Public Enterprises on June 9.

After The Indian Express exposed the irregularity, the DPE rejected the oil ministry’s list of nominees as the candidates did not meet the eligibility criteria set out in the March 2004 order.

The norms allow bureaucrats, technocrats, academicians and corporate bosses as independent directors on the board of a navratna or a miniratna.

‘‘These (politicians) would not have been the check and balances for which the independent directors were suggested by SEBI. Besides nuisance value, they were would be no value addition,’’ said a PSU chairman.

Since a director is paid Rs 10,000 per sitting, they would have made sufficient income as there are three sittings—including those of sub-committees—on an average per month.

It would have also provided them a visit to the Capital each month as they get executive class air fare from their home town. ‘‘They could come to Delhi on company’s expense and stay here longer for their personal and political agenda,’’ said the former chairman.

The stay would have been arranged at the company’s guest house and a car would have been provided for the entire duration, even though company rules do not permit them.

Beyond this, they would not have been able to influence the award of contracts to their favourite vendors or contractors since in all oil PSUs, the purchases are decided by the Executive Purchase Committee which excludes the government and independent directors.