Listed PSUs seek relief on independent directors

Expressing their inability to comply with the norms for appointment of independent directors, listed public sector undertakings (PSUs) have sought government intervention for relief.

Under the amended Clause 49 of the listing agreement, half of the board members, along with the executive chairman, must be independent directors.

The deadline for complying with the stipulation is April 1, 2005, and failure on this account could result in delisting of the companies.

Apart from functional directors, most big PSUs have two government directors on board. Under Clause 49, government directors on the boards of PSUs are not considered independent.

As the number of government directors and functional directors increases, PSUs find it difficult to match that number with independent directors.

They have requested the department of public enterprises (DPEs) to intercede on their behalf, and request market regulator Sebi to treat government directors as a seperate category.

This would bring down the number of independent members they have to take on board by at least two directors.