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Rediff.com  » Business » Fight club: Minister vs PSU honcho

Fight club: Minister vs PSU honcho

September 06, 2005 18:43 IST

In the red corner: Mani Shankar Aiyar, Union Petroleum Minister.

In the blue corner: Subir Raha, Chairman and Managing Director, Oil and Natural Gas Corporation.

The fight: It is a fight that seems to have blown over, at least for the moment. But it still is an indicator of sorts when it comes to government-public sector undertaking interaction.

The petroleum ministry wanted to appoint two more nominees on the ONGC board. ONGC executives argued that Securities and Exchange Board of India rules do not permit more than two government directors on the corporation's board.

Raha opposed the move tooth and nail, and threatened to resign.

Petroleum Secretary S C Tripathi tried to intervene and make peace, but Raha wrote to Aiyar alleging that the government was trying to intimidate him. Since then, Aiyar and Raha even had a war of words at a public meeting.

V K Sibal, Director General of Hydrocarbons, who was to be one of the government nominees, launched his own offensive on Raha, claiming that ONGC was telling the media about oil and gas discoveries, instead of first reporting them to the DGH.

The imbroglio was the tussle between a public sector undertaking boss and the parent ministry, which is also its single-largest shareholder. Raha is considered an efficient administrator. He heads one of the Navratna PSUs, which means ONGC is a profitable company. In fact, the ONGC is India's highest profit-making PSU and a Fortune 500 company. That gives Raha sweeping powers.

The Indian government has promised autonomy to Navratna PSUs, and critics of the ministry's action saw it as reneging on that promise.

Flashpoint: The ONGC annual general meeting, scheduled to be held on September 21. It is there that the resolution for the government nominee to the board had to be moved. Raha had threatened to move a counter-resolution at the AGM and quit.

Result: The crisis appears to be blowing over, with Aiyar declaring that he doesn't want a 'competent man' like Raha to quit. The minister has also criticised Sibal for his remarks.

The petroleum ministry has also indicated that it might take back Sibal's nomination to the ONGC board in an attempt to make peace with Raha.

The ministry resolution needed to be moved 15 days before the AGM in order to be tabled at the meeting. With the petroleum ministry having backed down, this round of the government-Raha battle seems to have blown over.

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rediff Newsdesk