Govt wants greater say in Petronet LNG

The Government may be keen on having a greater say in affairs of Petronet LNG as it is looking at appointing a bureaucrat as director on board of the nation's biggest liquefied natural gas (LNG) importer.

Petronet, in which state-owned GAIL India, Indian Oil, Oil and Natural Gas Corp and Bharat Petroleum hold 12.5 per cent stake each, is a private firm with Petroleum Secretary as its non-executive chairman.

Industry sources said Petroleum Ministry may be toying with the idea of appointing a Joint Secretary on board of the company to get greater say in procurement of LNG from nations like Qatar.

Apurva Chandra, Joint Secretary (Marketing and Gas) in Ministry of Petroleum and Natural Gas, attended the Petronet board meeting last week as a special invitee and may be the ministry's choice for becoming a full-time director on the company's board.
    
The board approved audited financial results for 2009-10 fiscal and declared dividend for the year.
   
Sources said the ministry may be keen on having a greater say in Petronet after it was alleged that the company was having a near free run in procuring LNG without it being accountable to any of the Government agencies.     Interestingly, the company's Managing Director and CEO P Dasgupta has resigned from the company board citing health reasons but if industry sources are to be believed he may be heading for a large corporate house.
   
Dasgupta had a five year term till August and was eligible for a two-year extension till he attained the super annuation age of 65 years. 
  
Sources said the Government cannot nominate any director on Petronet as it is not a shareholder in the company. A ministry official cannot be considered as independent director nor can he be considered as promoter director.
    
A Ministry nominee may fail the corporate governance norms, set out by market regulator SEBI, according to which all the four promoter PSUs have been given a position on the company board.
    
Besides, French firm GDF International, which has 10 per cent stake, and Gujarat Maritime Board and Asian Development Bank, which has 5.2 per cent interest, have been given directorial position in capacity as promoter.
    
A ministry official does not fit in promoter category, they said, adding that the Department of Public Enterprises (DPE) guidelines for appointment of directors too would not apply as Petronet is not a PSU.
   
However, an additional director can be appointed on Petronet board only with approval of the company shareholders and after passing the muster of SEBI and DPE guidelines.