A parliamentary panel has diagnosed serious lapses in corporate governance at Indian Rare Earths Limited (IREL). The panel found out that the state-run rare earth miner has been functioning without a regular Chairman-cum-Managing Director (CMD) for more than a year now. This is not all; all four non-official independent directors’ posts too have been lying vacant.
The Committee on Public Undertakings (CPU), in its action-taken report tabled in the Parliament recently, has raised serious questions over the absence of a full board, saying it not only hampers the functioning of the company but also violates established corporate governance norms applicable to Central Public Sector Enterprises (CPSEs).
The committee found that the post of CMD has been lying vacant since November 30, 2024, when the previous incumbent, Sarda Bhushan Mohanty, superannuated. The Director (Finance) has been acting as the CMD in additional charge since then.
The panel also noted that despite the Public Enterprises Selection Board (PESB) conducting interviews and recommending a candidate, the appointment could not be made as the Appointments Committee of the Cabinet (ACC) has not given its approval yet. It has resulted in the top leadership position remaining unfilled.
The panel also questioned the vacancy of all four posts of non-official independent directors on IREL’s board, which reduces the board’s effective strength to half of its sanctioned capacity of 12 directors.
The panel highlighted another complication, saying that this situation is inconsistent with Department of Public Enterprises (DPE) guidelines, which require unlisted CPSEs to have at least one-third of their board members as independent directors.
The Department of Atomic Energy (DAE), on its part, tried to impress upon the parliamentary committee by saying that it has taken up the issue of independent directors’ appointment with the Department of Public Enterprises (DPE) and that its efforts are on in that direction; the panel brushed it aside, saying this response could only be treated as an interim reply.
The committee has remarked in its report that prolonged vacancies at both the leadership and board levels undermine principles of corporate governance and weaken oversight at a time when IREL is executing strategically critical projects in the rare earth and atomic minerals space.
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