State-owned Indian Oil Corp (IOC) will hold its annual shareholders meeting on Wednesday in Mumbai amid speculation that it may seek to remove four independent directors appointed by the previous UPA government.
IOC has not circulated the notice of the 55th annual general meeting (AGM) to some of the independent directors as is mandatory under the new Companies Act, sources with the direct knowledge of the development said.
Of the 8 independent directors on IOC board, four are -- K Jairaj, former Additional Chief Secretary, Karnataka; Nesar Ahmed, past president of ICSI; Sunil Krishna, former director general of NHRC, and Sayan Chatterjee, former Secretary to government of India.
All the four directors were appointed to IOC board in March this year for a three-year term. Not sending them AGM notice has triggered speculation that the company may get a resolution passed at the AGM seeking their removal, they said.
While two of the directors confirmed not receiving notice of the AGM, IOC Chairman B Ashok and company secretary Raju Ranganathan did not answer phone calls and text messages seeking comments.
Sources said as per Section 101(3) of the Companies Act of 2013, the notice of an AGM needs to be served, amongst others, to every director of the company.
Industry insiders says any improper notice will not only invalidate the proceedings of the AGM but also put all the approvals therein to nullity.
Sources said IOC may be contemplating to remove some of the independent directors before the expiry of their term on instructions from above.
This removal, some say, may be in violation of the provisions of the Companies Act. As per Sector 169 of the Act, a company cannot remove any director before his term without giving him/her an opportunity of being heard.
The section also details the procedure in terms of a notice being given to the director, opportunity of being heard given to the director and circulating of his representations.
Independent directors of a PSU are appointed by the Appointments Committee of Cabinet (ACC) which consists of Prime Minister and Home Minister.
Any move to remove these directors without the concurrence of ACC may be illegal, they said.
It, however, could not be independently confirmed if a director can be removed by shareholders without ACC approval.
