An emergency board meeting of the Orissa-based power distribution firm Central Electricity Supply Company (Cesco) could not be held on Friday because of the absence of directors nominated by its partner AES Transpower of the US. Cesco was in the media glare following the threat by AES to pull out of it.
The meeting was called to discuss non-payment of salaries to the Cesco employees for July and also the restoration work being undertaken by the company in flood-affected areas.
In the eight-member board, AES, by virtue of its 51 per cent stake in Cesco, has five directors while the rest three are the state government nominees. For any board meeting, presence of four members, with at least one of them from AES, is required to maintain the quorum.
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Friday's meeting could not be held as there was not requisite quorum, said chairman of Cesco, Priyabrata Patnaik, who is also the chairman and managing director (CMD) of public sector Grid Corporation (Gridco). The next meeting will be held after a week, he said.
In fact, out of five AES nominated members on the Cesco board, four, including company managing director Roberto Podesta, are out of station. One non-functional director Anil Gupta was present in the city, but did not attend the meeting because of other "important pre-occupation".
Meanwhile, denouncing the attempt to hold the Cesco board meeting, an AES spokesman said, it had been convened when all the AES directors are away to attend an outstation business meeting of the company. He alleged that the meeting was called without due notice in terms of the article of association of Cesco. Hence, such a meeting was not valid and binding for the company, he observed and added that this does not help in finding solution to the problems faced by Cesco.
Sources said Cesco had not paid its 8,500 employees salary for July because of severe cash crunch. In fact, the company had been meeting its salary bill for the previous three months by breaking the escrow account created to make power purchase payments in violation of its contracts with Gridco and the order of the Orissa Electricity Regulatory Commission (OERC) .
OERC in response to an appeal by Gridco against such "illegal" action of AES had issued a warning to the US on the matter and also asked it to deposit all recievables of Cesco into the escrow account forthwith. AES has pointed out that because of its obligation to comply with the commission's order, it is not in a position to pay salary to the employees.