PSU boards may open to politicians

Minister writes to PM seeking appointment of non-official members.

Petroleum Minister Mani Shankar Aiyar may have his way on the appointment of Congress members on the boards of state-owned oil companies.

On the pretext of providing more autonomy to public sector companies, the department of public enterprises (DPE) has proposed that non-official directors on the board of these companies should include people from all walks of life, including politicians, trade union leaders and social workers.

Existing guidelines restrict the appointments to technocrats, professionals and retired bureaucrats.

"If you induct politicians, it will be good votes on PSU boards. But merit and expertise will be the major consideration in these appointments," said Heavy Industry and Public Enterprises Minister Santosh Mohan Deb, who has written to Prime Minister Manmohan Singh seeking changes to the norms.

If Deb's proposal finds favour with the Prime Minister, it can open the sluice gates for politicians to join the boards of public sector companies.

At present, there are nearly 900 vacancies for independent directors on the boards of 200 PSUs. These companies cannot avail of the autonomy provisions in the absence of independent directors.

A seat on a PSU board fetches an independent director sitting fees ranging from Rs 5,000 to Rs 10,000 per meeting, free air travel and five-star accommodation for all board meetings.

Deb justified doing away with the existing guidelines on the grounds that the previous National Democratic Alliance government had appointed a former Delhi University Students' Union president on the board of Mahanagar Telephone Nigam Ltd.

He added that in the past, politicians had been appointed on the boards of public sector companies like Andrew Yule Ltd and Bridge and Roof Company India Ltd.

Denying any wrongdoing, Aiyar, too, cited the MTNL appointment to justify forwarding the names of 35 Congress members to the search committee for appointment as directors on the boards of PSU oil companies.

"There is no pressure from the petroleum ministry to either move anyone out before completion of his or her term, nor is there any pressure for appointment of any particular person," he told reporters.

The petroleum ministry said in a statement it had not rejected the names forwarded by the DPE and had included the 35 candidates since they had requested to be nominated as directors to the PSU boards.

"Whether the search committee eventually recommends their names or not depends, of course, on whether the information provided in their CVs matches the prescribed criteria," said the statement.

It added that if their candidature did not match the prescribed criteria, they would not be recommended for appointment.