Air India may get 5 independent directors

New Delhi: The government could look at inducting as many as five independent directors on the board of Air India as part of its plan to restructure the airline.
Civil aviation minister Praful Patel has already indicated the government's resolve to "professionalise" the board and some eminent people from within and outside the aviation industry could be roped in on the AI board.
At present, the airline has 10 directors on its board but only one -- N Vaghul, former chairman of ICICI -- is an independent director. The rest are either government nominees or AI employee directors.
Prashant Narain Sukul and E K Bharat Bhushan are the government nominees since both are officers in the joint secretary (JS) level in the civil aviation ministry. Apart from the airline's chairman and MD Arvind Jadhav (who is also a bureaucrat), the remaining members are heads of individual SBUs and directors of functions such as finance and personnel.
As per the Companies Law, AI can have up to 15 directors on its board and maximum seven independent directors. Since Vaghul is the only independent director at present, the government could look at inducting all five new appointees as independent directors. It could also decide to replace some of the current directors but there is no confirmation on this till now.
An airline insider said the responsibility for the present financial mess of the national carrier should lie with the board members since the board was always informed of all decisions on finances, aircraft purchase, personnel expenses, etc. The present situation -- where borrowings have shot up to beyond Rs 15,000 crore -- was not created "in a day," he said.
06/07/09 Sindhu Bhattacharya/Daily News & Analysis

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Categories: NACIL Jul 2009