Date:22/08/2008 URL: http://www.thehindubusinessline.com/2008/08/22/stories/2008082252381000.htm

Back R.S. Pandey set to join Petronet board

Richa Mishra

New Delhi, Aug 21 Petroleum Secretary Mr R. S. Pandey is set to join the Board of Petronet LNG Ltd (PLL), a position left vacant after his predecessor Mr M. S. Srinivasan demitted office on July 31. Mr Pandey’s name has been approved by the Government.

Sources told Business Line that the next step would be PLL circulating a resolution to its Board members for not only considering Mr Pandey’s appointment as an independent director but also to designate him as the Chairman of the Board.

This puts to rest all speculations on whether the chief of four PSU stakeholders — ONGC, Indian Oil Corporation, Bharat Petroleum Corporation, and GAIL — in the company will be appointed as Chairman on rotation. Subsequent, to Mr Srinivasan demitting office in keeping with the norm followed since the incorporation of PLL, the Board had invited Mr Pandey to take the position.

Petronet is a venture with four PSUs holding 12. 5 per cent stake each, Gaz de France 10 per cent, ADB 5.2 per cent, and financial institution and general public 32.8 per cent. According to the Articles of Association (AoA) of PLL, its board invites the Secretary Petroleum to become the Chairman and in the event of the Secretary declining the request, the search committee of the Board will have to find an independent director and then select a chairman among the Board members.

The company Board constitutes of 15 members including a non-executive Chairman. It has five independent directors including the Chairman, a nominee each of the four public sector promoters, three whole time directors, and one representative each of stakeholders Gaz de France, Asian Development Bank, and a nominee of Gujarat Maritime Board.

The AoA of the company extend an exclusive right of an affirmative vote to four PSU nominees, without which no major decision of the company can be taken.

Any investment decision, loans or budget decision can be taken only when all four nominees agree, sources said. Also according to the AoA, without the affirmative vote no director can be appointed and no asset can be divested.