New Delhi: State-run BEML Limited, a Miniratna Category I CPSE, functioned without a Director (Finance) for 23 months and without a Director (HR) for 21 months, a report by the Comptroller and Auditor General (CAG) of India has said. The report flagged violation of rules with respect to the filling of key managerial positions within the stipulated time period at a total of 15 CPSEs.
“It was also observed that in the CPSEs listed in Table 3.
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14, vacancies of whole-time key managerial personnel were not filled within the period of six months prescribed in section 203 (4) of the Companies Act, 2013,” the report said.
What does the law state?
The Section 203 (4) of the Companies Act, 2013, states, “If the office of any whole-time key managerial personnel is vacated, the resulting vacancy shall be filled-up by the Board at a meeting of the Board within a period of six months from the date of such vacancy.”
“If a company contravenes the provisions of this section, the company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees and every director and key managerial personnel of the company who is in default shall be punishable with fine which may 128 extend to fifty thousand rupees and where the contravention is a continuing one, with a further fine which may extend to one thousand rupees for every day after the first during which the contravention continues,” Section 203 (5) of the Act states.
HMT Ltd had no Director (Operations) for 46 months, says CAG
While HMT Ltd failed to appoint a Director (Operations) for a period of 46 months after the post fell vacant, Coal India Ltd, which is a Maharatna CPSE, functioned without a Chairman and Managing Director (CMD) for seven months. The Fertilisers and Chemicals Travancore Ltd did not have a CMD for 17 months, Director (Finance) for 21 months and Director (Tech) for 21 months.
Balmer Lawrie functioned without MD for 12 months
The report also said that Balmer Lawrie functioned without a Managing Director (MD) for 12 months and NALCO did not have a Director (Commercial) for 13 months. State Trading Corporation (STC) of India Ltd did not have a Director (Marketing) for nine months and Engineers India Ltd did without a Director (Finance) for 11 months.