Sucheta Dalal :Air India's finance head does not have details of management perquisites
Sucheta Dalal

Click here for FREE MEMBERSHIP to Moneylife Foundation which entitles you to:
• Access to information on investment issues

• Invitations to attend free workshops on financial literacy
• Grievance redressal

 

MoneyLife
You are here: Home » What's New » Air India's finance head does not have details of management perquisites
                       Previous           Next

Air India's finance head does not have details of management perquisites  

October 28, 2009

 

At a time when every regulator and investor is beating the drum for greater transparency through disclosures and ministers are expressing concerns about obscene salaries, several companies are blatantly flouting disclosure requirements specified by the Companies Act, 1956.
 
State-run National Aviation Co of India Ltd's (NACIL) general manager for finance, AJ D'souza has said that details of pay, perks, privileges, facilities enjoyed by the company's top brass were not available. NACIL was formed after the merger of state-run carriers, Air India (AI) and Indian Airlines.
 
According to a PTI report, this reply came on a right to information (RTI) application filed by activist Subhash Chandra Agrawal who sought the details of pay, perks, privileges and facilities enjoyed by top honchos of cash-strapped Air India and Indian Airlines and that of the Civil Aviation Minister.
 
"We tried our best to obtain the information sought by you but have not received the same," Mr D'Souza said in his reply.
As per the RTI Act, information sought cannot be denied unless it comes under exemption clauses listed in the Act. The information cannot be refused without giving any reasons justifying the denial.
 
Air India had earlier admitted that a chairman and managing director for some months was issued 121 free air-passes by virtue of including "spouse, children, parents, brothers, sisters, son-in-law, daughter-in-law" in definition of family-members for purpose of free air-travel.
 
Besides seeking details of pay and privileges of AI top brass, Mr Agrawal had also sought details of all the contracts and agreements by Air India or Indian Airlines terminated by them by paying damages or compensation to other parties.
In his application, he cited examples in which Air India and Indian Airlines had to pay losses suffered by other parties.
Air India had to suffer a loss of Rs1.3 billion in 'CaribJet' scandal because of a law-firm drafting the agreement with CaribJet, accused of leasing defective planes to Air India.
 
Mr Agrawal also sought to know the amount of loss to airlines in such cases. But Mr D'Souza did not give any details and also did not cite any reasons for not giving the information, which is mandatory as per the RTI Act.
 
Mr Agrawal had said in his appeal before higher authorities of the aviation company that the CPIO after seeking several extensions to provide information, did not provide information.
 
But NACIL is not a standalone case. There are several companies who still have not disclosed the information in their annual report, mandated in the Companies Act 1956. Section 217(2A) of the Companies Act makes it mandatory for every listed company to include in the director's report a statement showing the name of every employee who is in receipt of remuneration (currently not less than Rs2 lakh) or which is in excess of that drawn by managing director or whole-time director or manager and holds by himself or along with his spouse and dependent children, not less than 2% of the equity of the company. The section also requires that the statement mention whether such person is a relative of any director or manager of the company and if so, the name of such director. 
 
However companies like ABG Shipyard, Aptech, Core Projects, Sterlite Industries, Mangalore Refineries and Petrochemicals Ltd and Network18 still have to disclose remuneration details of employees earning more than a stipulated amount. In their defence, the companies are quoting a certain provision in the Companies Act and a SEBI circular to avoid the disclosure.
 
However, there are some big stalwarts, like Infosys Technologies and all the Tata group companies, who regularly file the necessary disclosures about the remuneration details of employees earning more than a stipulated amount in their annual reports.
- Yogesh Sapkale [email protected]

-- Sucheta Dalal



 



Recent Comments