CLB allows govt to have 3 directors in Eveready

The Company Law Board (CLB) has allowed the government to appoint three directors on the board of Kolkata-based Eveready Industries for three years to "protect the interests of stakeholders", a CLB official said here today.

The CLB order dated December 20 has been passed under Section 408 of the Companies Act, which allows the Centre to appoint directors on company boards.

Deepak Khaitan, Eveready's executive vice-chairman and managing director, said the company would decide on its future course of action after going through the details of the order.

CLB sources said the government wanted to appoint 12 directors following charges of large inter-corporate loans to associate companies in which the company's directors were directly or indirectly interested. The company was also charged with diversion of funds.

The charges were based on an inspection report of the department of company affairs.

The CLB did not agree with the company's plea that the matter be treated as closed since the board of directors had been revamped and included independent directors.