Govt may ban Mahindra from boards of companies

Amid strong public reaction to the judgement in the Union Carbide case, the government is understood to be looking at legal position to check if Carbide India’s non executive Chairman Keshub Mahindra could be barred from taking directorship in any company.

Corporate Affairs Minister Salman Khurshid is believed to have asked his officials to study relevant portion of the Companies Act and the Ministry’s Legal Wing is assessing if the clauses relating to disqualification of a director could fit the case.

“Sections 283, 269, 203 and 274 of the Companies Act, 1956, refer to disqualification of a director if convicted by a court of law. We are studying those provisions to study if they deem fit for Keshub Mahindra’s disqualification,” a government official told PTI.

However, as per legal opinion obtained by the Mahindra Group, its founder Chairman Keshub Mahindra could retain his position across companies, as he still has the option of challenging the verdict of two-years’ imprisonment handed to him and six others by a Bhopal Court for the tragedy in the city that claimed over 15,000 lives.

“Mahindra will prefer an appeal, against the order of conviction and sentence within the stipulated period of 30 days.

“There’s no necessity for him to vacate office as a director in the various companies he serves in view of in-built protection under sub-section(2) of section 283 of the Act,” Mahindra & Mahindra said in a statement.

Mahindra, according to website of Mahindra & Mahindra, is on the board of about 10 companies including HDFC and Bombay Dyeing, besides his own group companies.

In addition to Mahindra, six others were sentenced to two years imprisonment by the court on charges of negligence and culpable homicide not amounting to murder in the Bhopal gas tragedy case. While one accused had passed away during the course of the trial, Carbide’s former head Warren Anderson was not tried.

Besides businesses ranging from auto to software, Mahindra, a graduate from Wharton, University of Pennsylvania, USA, is also a member of the prestigious Prime Minister’s Council on Trade and Industry.