M R Chhabria Move To Induct Kin On Swc Board Opposed

The department of company affairs (DCA) has strongly objected the induction of Komal Chhabria Wazir, daughter of Shaw Wallace and Companys (SWC) Dubai-based chairman Manohar Rajaram Chhabria, on the board of SWC. SWC has, however, clarified that the new member is a replacement as an alternate director to Chhabria, and not an induction as has been pointed out by the DCA.

The issue had come up for hearing at the Company Law Board (CLB) on Thursday last, where SWC said it was not against the CLB advice and would not hold any board meetings before the issue is settled, a Company Law

Board member told Business Standard.

The next hearing would come up on March 17 after an application is filed by the company, he said.

The government counsel had said that SWC violated the CLB order passed in September last, which stipulated that no member could be inducted on the board of directors of the company.

An SWC spokesperson said the appointment of Komal Chhabria Wazir is not a violation of the CLB order as the move was only an interim measure that neither seeks to expand nor alter the composition of the board, the spokesperson said.

The executive directors on the SWC board include P J Rao, Ravi Jain and P L Narasimhan.

Komal Chhabria Wazir is an alternate director on behalf of her NRI father M R Chhabria.

The DCA in a petition to the CLB alleging financial irregularities and other affairs of SWC which appeared to be prejudicial to the interests of the company had insisted that only government nominees could be inducted to the companys board. The department had been insisting upon induction of eight members on board under Section 408 of the Companies Act, 1956.

The DCA has now settled in for appointing three government nominees on board which would add up to a total of six directors.

SWC had, in December last, appointed two government directors on board including former Sebi member L C Gupta and C K Hazari, former joint managing director of Escorts. The financial institutions had nominated P K Pandit to the SWC board.

The induction of three additional members to the SWC board would give weightage to non-executive directors compared with three executive directors of Shaw Wallace.

The SWC board of directors, in its latest meeting, had decided to start a time-bound disinvestment, besides taking stock of an orderly liquidation of its debts.

The directors also discussed various alternatives for restructuring the companys businesses to tide over liquidity problems.Govt counsel said SWC violated the CLB order which stipulated that no member could be inducted on the board.