New Delhi, July 06: 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.
He added that several board members have either been overruled or eased out in the past for asking uncomfortable questions. In 2004, the CMD of Indian Airlines Sunil Arora, in a missive to the Cabinet secretary, had questioned the lack of transparency in aircraft purchase.
V Subramaniam, a former financial advisor to the civil aviation ministry, was “eased out” of the board because he asked “uncomfortable” questions.
The Air India board has been graced by illustrious people in the past — from Ratan Tata to Rahul Bajaj, Ajit Kerkar and Russi Mody. So it’s not the first time that well-known names are being invited to join as directors.
Pallam Raju, currently the minister of state for defence at the Centre, was a part of the Air India board till 1997. Raju told DNA, “In the current scenario, it is important to have well-qualified independent directors on the board, who can help steer the airline out of the current mess.”
–Agencies