Absence of independent directors hurdles decision making at CIL -Governance Now

Absence of independent directors hurdles decision making at CIL

Coal dues to CIL mounting in the absence of decision making abilities

GN Bureau | September 12, 2013

It has become easy for a section of coal consumers to avoid attracting penalty for payment defaults due to the absence of a single independent director on the board of Coal India (CIL).

Besides West Bengal, which has defaulted on nearly Rs 2,000 crore of payments, a set of power utilities has held back payments worth over Rs 12,000 crore, equivalent to two months’ sales to CIL. The majority of the dues are payable by the central government-owned NTPC and DVC and state utilities of West Bengal and Jharkhand.

Coal India has been reeling under the absence of a single independent director on board since August 23. As a result, discussion on pressing issues such as purchase of costly equipment, rising coal dues, appointment of third-party samplers, a preliminary proposal for a share buyback has been put on hold. The government is expected to complete the appointment of new directors by the end of this month.

Refuting claims that state utilities have kept piling up dues NTPC chairman Arup Roy Chowdhury told Business Line that the two companies are in an advanced stage in settling dues through a third-party audit.

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