The five independent directors on the board of state-owned Dredging Corporation of India Ltd (DCI) have written to the government seeking the removal of Chairman K Rama Mohana Rao, citing “break down of corporate governance” at the country’s biggest dredging contractor, multiple sources said.
Rama Mohana Rao, an officer of the Indian Administrative Service (IAS), is also the Chairman of Visakhapatnam Port Authority, the largest shareholder of DCI with 19.47 per cent stake.
Abstains from voting
The demand for the removal of Rao follows an embarrassing episode in December when he “abstained” from voting on a shareholder’s resolution to confirm the appointment and remuneration of GYV Victor as the Manging Director and Chief Executive Officer (CEO) for a five-year term at the annual general meeting (AGM) held on December 17.
Rao’s decision to “abstain” from voting is reflected in a copy of the AGM proceedings filed by DCI with the BSE. BusinessLine reported the development on January 14.
Rao, as the Chairman of the board of DCI, had earlier “unanimously” approved the appointment of Victor as MD and CEO from March 1, 2021.
DCI divestment
In a strategic disinvestment deal, Visakhapatnam Port Authority, Paradip Port Authority, Jawaharlal Nehru Port Authority and Deendayal Port Authority together acquired the Central government’s 73.47 per cent stake in DCI for ₹1,056 crore in March 2019.
Jawaharlal Nehru Port Authority, Deendayal Port Authority and Paradip Port Authority owns 18 per cent stake each in the Visakhapatnam-based company.
At the AGM, the other three shareholders’ representatives from Jawaharlal Nehru Port Authority, Deendayal Port Authority and Paradip Port Authority voted in favour of the resolution to confirm the appointment of Victor.
Sources in the Ministry of Ports, Shipping and Waterways said the independent directors on the board of DCI had written a letter seeking the removal of Rao from the chairmanship of DCI.
When contacted by BusinessLine, the independent directors declined to comment.
DCI too could not be reached for comment.