No director quit our board: Power Grid, Maha Seamless

The Institute of Chartered Accountants of India (ICAI) plans to scrutinise the books of companies that have seen independent directors resign in the last two months, after the role of such directors came under intense scrutiny in the wake of the major financial fraud at Satyam. 

Some of the companies where the Independent Directors quit include Ballarpur Industries, Power Grid, Power Finance Corporation, CMC, Essar Oil, Technocraft Industries, Jindal Drilling & Industries, Maharashtra Seamless, Pyramid Saimira and MIRC Electronics.

Reacting to the news, SK Chaturvedy, CMD of Power Grid Corporation of India, clarified that not a single director has quit their board. He added that there has been a replacement of one of the directors as a part of a routine reshuffling in the Ministry of Power.

While Anil Jain, CFO of Maharashtra Seamless, said there has been a change in one of the Independent Directors but that is more so to comply with the revised Sebi guidelines. 

With regard to a more detailed scrutiny by the board after the Satyam fiasco, Chaturvedy said, that Independent Directors and other directors are taking more interest and have become more cautious. “However, as far as Sebi guidelines and peer auditors review are concerned, we are having lot many balances and checks, and our audit committee is also functioning very effectively,” he added.

With respect to the placement of independent directors, Chaturvedy said the government has its own terms and conditions for appointing independent directors in the PSU board. “So as per the normal Government of India guidelines, it goes to the DPE (Department of Public Enterprises) and from there to the Cabinet Committee and then it gets approved by them.

Speaking on the same issue, Jain said they have a policy where they pick up people from the concerned industrial experience either who are on the banking board or are retired Chairmen, Managing Directors, related to the FIIs or some expert Chartered Accountants or people having good amount of industrial experience which comes quite handy when the affairs of the company have to managed.

Also read: ICAI to check books of cos whose directors resigned lately