Ed May Showcause Fi Nominees On Itc Board

The Enforcement Directorate may issue show-cause notices to the financial institutions nominee directors on the ITC board in connection with the $100 million Foreign Exchange Regulation Act (Fera) violation charges levelled against the cigarettes major.

The directorates move could set a precedent for current investigations into several other cases of alleged Fera violations. It is being seen as particularly significant in the light of the debate raging in government circles and industry bodies over whether responsibility for a companys misdemeanours can be fixed on FI-nominated directors.

The directorate had earlier summoned the nominee directors on the ITC board in connection with the case. This had triggered off a severe backlash from FIs, including a statement by IDBI chairman S H Khan that monitoring the nitty-gritty of company affairs was beyond the scope of nominee directors, given their paucity of time and numerous responsibilities.

Revenue department officials said the show-cause notices will be served to the company and various individuals by the end of the month.

The directorates Calcutta office has already sent the draft notices to the headquarters at Delhi for further scrutiny.

Sources said the zonal office has prepared a preliminary list of around 20 directors and executive directors of ITC Ltd who could be served the notices.

The drafts are being carefully reviewed in Delhi to arrive at a final list since the directorate does not want to be unfair to anyone, according to a senior official.