MTNL, Sail, NTPC flouting norms: CAG

State-run industry leaders like MTNL, Sail and NTPC have been rapped by the CAG for flouting corporate governance norms by not appointing required number of independent directors on their boards as per clause 49 of the listing agreement.

 "Out of 44 listed government companies, the Board of 30 companies had not been constituted as per clause 49 of the listing agreement, as on June 30, 2007," said Comptroller and Auditor General (CAG) in its report public sector undertakings, tabled in the Parliament today.

 Market regulator Sebi's clause 49 of listing agreement makes it mandatory to appoint one half independent directors of the total number of board members if the chairman has executive powers and one third independent directors in case chairman is non-executive.

There was only one independent director on the board of MTNL, which operates telecom services in Delhi and Mumbai, as against the requirement of six independent directors, the CAG report noted.

Steel Authority of India (Sail)had appointed only 10 independent directors against the requirement of 45, while power sector major NTPC appointed only 4 independent directors against the requirement of 12 members.

Meanwhile, among the state-owned oil companies, ONGC, IOC, BPCL had five, five and three independent directors against the requirement of 14, 14 and 10 independent directors, said the CAG report.

As many as nine of the listed public sector companies such as State Trading Corporation Limited, Container Corporation of India, National Aluminium Company Limited and Baslmer Lawrie Company Limited did not have even a single independent director on their boards, it noted.