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Kohinoor Mandal

Kolkata , Jan. 4

IN an interim order, the Calcutta High Court has stayed the recent Company Law Board (CLB) order on the appointment of three independent directors on the board of Eveready Industries India Ltd, the flagship company of BM Khaitan.

According to a senior company official, Eveready Industries moved the Calcutta High Court immediately after it received the CLB order. On December 30, Mr Justice Pranab Kumar Chattopadhyay passed the stay order.

The official also said the matter was likely to come up for hearing at the Calcutta High Court sometime in the middle of this month.

Earlier, Eveready Industries challenged the CLB stating that it suffered "from various legal infirmities" and that it did not provide "any reasoning or rationale" behind its order.

In October 2002, the Central Government had filed a reference application under Section 408 of the Companies Act 1956 before CLB for appointment of 12 directors in the board of Eveready Industries. In its application, the Government brought several allegations relating to certain investments, inter-corporate loans and deposits and provision of corporate guarantees by Eveready Industries.

"Going by the factual position the allegations made in the application did not satisfy the essential ingredients of the criteria prescribed under Section 408 of the Act," the company stated.

Eveready Industries' further stated that its existing 10-member board of directors was already "broad-based". It included a non-executive chairman and four independent directors of "public eminence".

The company official reiterated that Eveready Industries was fully complying with the regulations of corporate governance as prescribed by the Securities and Exchange Board of India (SEBI).

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