The Hindu : National : Aiyar to look into issues raised by ONGC chief

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Wednesday, Sep 07, 2005

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National

Aiyar to look into issues raised by ONGC chief

Special Correspondent

NEW DELHI: The controversy over the appointment of more government directors to the board of the Oil and Natural Gas Corporation (ONGC) seems to have died down but the issue of replacing independent directors on the boards of public sector undertakings may now take centre stage.

Petroleum Minister Mani Shankar Aiyar has not only said he does not want ONGC chief Subir Raha to go but is also considering all "pertinent issues" he raised in a recent communication.

Mr. Raha threatened to resign if the government insisted on appointing V.K. Sibal, Director-General of Hydrocarbons, to the ONGC board since he was an oil industry regulator.

Petroleum Secretary S.C. Tripathi, however, told reporters that the Ministry was seeking the advice of the Law Ministry and the Department of Public Enterprises on replacing independent directors on the PSU boards: whether the independent directors should constitute 50 per cent of the board or 30 per cent under the existing guidelines on good corporate governance?

Another issue was whether the independent directors could be asked to leave before the end of their three-year tenure. This query was based on a company law provision, which stipulated that one-third of the directors retire every year. It was being enquired whether the Government had the right to reshuffle or recast the board if this did not happen.

Earlier Mr. Aiyar, who returned from a tour of Norway, Iceland and Bangladesh on Tuesday morning, said he would look into the issues raised by Mr. Raha. His objections were referred to the Department of Public Enterprises and the Law Ministry as these were relevant issues. Mr. Aiyar criticised Mr. Sibal for airing his differences with the ONGC chief in public.

Mr. Raha had sent a letter to the Minister opposing the move to appoint Mr. Sibal on the ground that a regulator could not sit on the board of the company he governed. The issue is expected to be taken up at the forthcoming ONGC annual general meeting.

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