New Delhi, March 6 :     The Union government today asked the Company Law Board (CLB) to appoint four more nominee directors on the board of Shaw Wallace & Company to ?prevent any further fraud and mismanagement in the company.? Arguing before the CLB, government counsel A.K. Vali said the present strength of the nominee directors are only two as against four representing the company?s effective management?s interest. The two nominees are Mr L.C. Gupta and Mr C.K. Hazari, Thus the interest of the state-owned financial institutions and others were not safe in the hands of the present board of directors of the company, he said. The appointment of four more persons will raise the strength of government nominee directors to six. This will prevent SWC?s executive board from any further mismanagement of the company. Citing a report sent by L.C.Gupta to the secretary of the department of company affairs, the government counsel said ?this report is glaring . It speaks volumes of their conduct.? The report details several allegations of misconduct and financial mismanagement. Anil Diwan and P. Ganesh, advocates appearing on behalf of the Shaw Wallace & Co Ltd, however, argued that Mr Gupta was biased in favour of the Shaw Wallace Employees Federation and sought his replacement. The two-member bench of the Company Law Board headed by Justice P.K. Majumdar decided to hold further hearings before taking a decision on the issue. Mr Vali pointed out that even the auditor?s reports for the years 1995-96 and 1996-97 pointed out several irregularities committed by the company. In 1995-96, the auditors recorded that there was no physical verification of inventories and discrepancies in book records and actuals could not be made. Nor was the net worth of the company ascertainable. Rs 293 crore was recoverable from subsidiaries with negative net worth and Rs 77 crore in principle and Rs 49 crore in interest from other companies which were covered by a scheme of amalgamation. Even the provident fund and employees? state insurance scheme dues were not deposited regularly, the lawyer pointed out. The auditors even stated that they were unable to ascertain whether the company was sick. Shaw Wallace also has a few cases pending before the Calcutta high court and the company y may have to pay huge sums to its corporate creditors. The cases may come up for hearing any time now.