About six months ago, the Congress and other opposition parties made life difficult for the Narendra Modi government in general and its Foreign Minister Sushma Swaraj in particular on the specious ground that her husband Swaraj Kaushal appeared in courts for the alleged fugitive Lalit Modi of IPL infamy thus constituting a quid pro quo for her interceding with the British government on his behalf on humanitarian grounds for issuance of travel papers to Portugal to be by the side of his ailing wife.
Precious parliamentary time was lost in the ruckus. The opposition wanted her scalp but to Modi’s credit, he didn’t budge.
Now another minister, the suave and urbane, Jayant Sinha, Minister of State for Finance, could be at the receiving end of opposition fusillade. The charge, muted for now, is his wife has been appointed as an independent director in the IT major Infosys.
She is not only the wife of a minister but has her own independent personality qualifying her for the independent director’s role unless she falls foul of section 149(6) of the companies Act, 2013. She founded Pacific Paradigm Advisors an Asia focused investment and management consultancy firm.
Infosys owes no explanation to anybody to save its shareholders on the choice of Punita Sinha any more than the beleaguered Saradha Chit Fund owed to the nation explanation on the choice of Nalini Chidambaram, wife of the then Finance Minister P. Chidambaram, as its counsel. Why she was chosen and what she brings to Infosys’ table are all matters the shareholders must be seized of at the general meeting appointing her.
Ministers are expected to be Caesar’s wife -- beyond suspicion or reproach. But the company law goes a step further and contains a strict code to nip conflict of interest in the bud. Accordingly, a director must disclose all his interests, direct or indirect, at the time of his appointment as well as any time he acquires any interest in any entity thereafter.
For example, KV Kamath, who was non-executive chairman of ICICI Bank when he took up position of chairman at Infosys, would have disclosed to both the companies his interest in each other so that he is not part of the decision in either company that awards a contract to the other. Punita Sinha must presumably have disclosed that her husband is MOS Finance and this must have been recorded in a separate register that keeps note of directors’ interest that could expose him/ her to conflict of interest charge.
She cannot participate in board meetings much less vote on resolutions involving matters she is interested in. For example, should Infosys go for another round of GDR/ ADR issue abroad, she will have to recuse herself because the application for this purpose has to be made to the Finance Ministry.
If she has disclosed and scrupulously avoids conflict of interest in her conduct as director of Infosys her appointment cannot be questioned or challenged. The Caesar’s wife argument cannot be raised to puritanical levels as to leave ministers’ spouses unemployed. It is time politicians made a code of conduct for themselves taking a cue from the company law before upbraiding others, the ones whose acts are kosher.
The public, including our Parliamentarians, in awe of the flamboyant Vijay Mallya of the now grounded Kingfisher Airlines, were mute spectators to him being on the parliamentary standing committee for the civil aviation industry.
In a country where boardrooms are clubby and otherwise packed with relatives and friends and cricketers and film stars, Infosys in fact must be lauded for bringing in an expert. The Air India board was till recently star studded with the justification being they were all seasoned travelers and fliers. Touché!
In any case the company law does not disqualify interested directors; it only makes the boardroom out of bounds for them for the nonce - when the board is seized of a matter a director is interested in. The company law in other words clearly crosses the bridge when it comes to it.
Let Punita Sinha then plunge into Infosys’ affairs with gusto but stay away from board meetings when it is seeking approval from Finance Ministry or any other Ministry so as to ward off the charge that her husband’s influence extends to other departments as well.
Updated Date: Jan 15, 2016 17:20 PM