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CIMA Gallary

Godrej quits HPL board, govt tries to keep him back

Calcutta, March 5: Jamshyd Godrej, the chairman of Godrej & Boyce, has stepped down from the board of Haldia Petrochemicals Ltd (HPL) but the Bengal government has intervened and is trying to persuade him to stay on.

The resignation and the effort to keep Godrej back coincide with heightened activity to fill berths on the board at a time the government has refused to hand over majority stake to Purnendu Chatterjee.

Godrej, the lone independent director in the company, had joined the board in the middle of the last decade at the behest of erstwhile HPL chairman Tarun Das.

Godrej, sources said, cited pre-occupation with other engagements as the reason for resigning from the board.

The HPL board accepted the resignation soon after Godrej conveyed his decision about a week ago. However, when the Bengal government, a key investor in the project, came to know of the development, it launched the effort to retain him.

Industries minister Partha Chatterjee has over the weekend called Godrej and requested him to stay on in HPL. The minister has confirmed the development.

Godrej has declined comment. “I cannot talk about Haldia,” Godrej told The Telegraph on Saturday in response to a question on his resignation.

Official sources said the Bengal government was hoping that Godrej would accede to the minister’s request.

The chain of events suggest that the Bengal government may have got to know of the resignation only after it was accepted by the company, now in effective management control of Purnendu Chatterjee, the private promoter of HPL and chairman of The Chatterjee Group.

If Godrej sticks to his decision, the HPL board, which once had 15 members, will be left with 13. Five board members represent lenders, four Purnendu Chatterjee and three the Bengal government. One berth is held by managing director Partha Bhattacharya. The slot occupied by former diplomat Naresh Chandra, another independent director brought in by Tarun Das, is now vacant.

Since Tarun Das was himself chosen by the state government, then under the Left Front, it was assumed that the independent directors picked by him would steer clear of partisan board politics and focus on protecting the interests of the company. Neither Chandra nor Godrej gave any cause during their tenures to suggest any deviation from such an expectation.

The initiative by minister Chatterjee is being seen as an indication that the government counts on Godrej as someone who will stand up for the cause of HPL without succumbing to any pressure.

The board’s decision to readily accept Godrej’s resignation and the minister’s effort to dissuade him assume significance against the backdrop of suggestions that not only TCG and the Bengal government but also others are keen to have a bigger say in the HPL board.

Sources said the private promoter was keen that the berth vacated by Godrej be filled by Kishor Bhattacharya, a nominee of TCG firm Winster.

Indian Oil Corporation, a minority stakeholder with the desire to play a bigger role, is also looking at a slot for its director (finance). SBI, the lead banker for Haldia’s working capital loan, too, wants a seat.

This is the second time in less than a month that the Bengal government is directly intervening in HPL. Partha Chatterjee had held a meeting with top lenders of the company in February to assure them of his government’s continuous support to the company.