Anand Mahindra offers to resign from Nacil board

Citing conflict of interest, Mahindra & Mahindra Vice-Chairman Anand Mahindra today offered to resign from the board of National Aviation Company of India Ltd, which runs state-owned carrier Air India.

Civil aviation ministry officials confirmed this and indicated that Ambuja Realty Group Chairman Harsh Neotia and Federation of Indian Chambers of Commerce and Industry Director General Amit Mitra, the other two independent directors, might also resign. People close to Neotia, however, denied any such move, while Mitra did not comment.

Mahindra, in his letter to aviation minister Vayalar Ravi, said, “The recently concluded Aero-India 2011 at Bangalore has thrown up business opportunities for my company Mahindra & Mahindra Ltd, which was a potential conflict of interest and thereby throws up questions of good board practice. Hence my request.”

In March 2010, Mahindra along with Air Chief Marshal Fali H Major (retd), Mitra and Neotia were inducted as independent directors to the government carrier’s board.

Mahindra said his firm had fruitful discussions with international aerospace corporations, encouraging the group to aspire to become a leading component player.

“We are developing the capability to supply components to the major suppliers from where Air India sources its aircraft. In view of this development and the favourable business prospects, which recently emerged for M&M's aeronautical business in Bangalore, I feel that my continuing as a director would not be in accordance with the highest standards of corporate governance,” the letter read.

In 2009, M&M had forayed into the aerospace business by acquiring 75.1 per cent stake each in two Australian aerospace firms — Aerostaff Australia and Gippsland Aeronautics — for Rs 175 crore and planned to make aircraft and allied components to service the global market.