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Wednesday, July 11, 2001

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CPCL to seek nod for raising board strength

M. Ramesh

CHENNAI, July 10

CHENNAI Petroleum Corporation Ltd (CPCL) wants to increase the strength of its board of directors by inducting three independent directors. The company will seek shareholders' permission for this at its forthcoming annual general meeting.

CPCL has 13 members on its board, including three directors nominated by Indian Oil Corporation, three nominees of National Iranian Oil Company, the Industries Secretary of the Government of Tamil Nadu and the Chairman of the Chennai Port Trust. (The thr ee IOC representatives recently replaced the three nominees of the Union Government after the Government sold its holding in CPCL to IOC).

The three nominees of IOC, the Industries Secretary and the Port Trust Chairman are treated as outside independent directors.

According to the norms for good corporate governance, at least fifty per cent of the board of directors should comprise independent directors. Therefore, the company wants three more independent directors in its board, CPCL's Director (Finance), Mr. S.V. Narasimhan, told Business Line today.

There is another reason as well. The presence of professional independent directors will help CPCL get `mini-ratna' status, which will give the company greater autonomy.

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