Companies

Almost one year on, Coal India remains without an independent director

Pratim Ranjan Bose Kolkata | Updated on January 24, 2018

BL15_COAL



It’s a record Coal India Ltd could have done without. For over 10 months since September 10, 2014, the ₹74,120-crore (turnover) miner has been without a single independent director against the required strength of seven.

After the Narendra Modi government came to power, three independent directors resigned in the first week of September, acting on indications by the Centre. Three more were voted out at the AGM on September.



While the rule is that vacancies should be filled up within 90 days, the government has been silent about CIL. A question to Coal Secretary Anil Swarup went unanswered.

CIL is probably an exception in not having any independent director at all compared to other major central public sector units like ONGC, IOC, BPCL, SAIL, NTPC that have one or two.

No corporate governance

Indeed, in the CIL group — including seven mining outfits and one consultancy arm — there are only four independent directors against the norm of 61. Some of these subsidiaries like Mahanadi Coalfields (MCL) or South Eastern Coalfields (SECL) are among the biggest of miners in the world but have been without an independent director for nearly a year.

Transparency sacrificed?

Unlike in the past, independent directors have been given an expanded role by the Companies Act, 2013. Key committees on audit, risk management, remuneration, and CSR cannot function without them.

Govt having last laugh

According to corporate observers, the absence of independent directors would be advantage the government, whose representation on CIL board remains intact.

In 2012, the CIL board created corporate governance history for a state-owned company by resisting the government’s diktat to enter into fuel supply pacts on ‘unfair terms”. Now, the balance of power will be back with the government.

Published on July 23, 2015

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor

You May Also Like