MSFC board shuts door on politician, wants a professional boss

MSFC board shuts door on politician, wants a professional boss
SHAILESH GAIKWAD

MUMBAI, JULY 1: The Shiv Sena-dominated board of directors of the Maharashtra State Financial Corporation (MSFC) on Friday rejected the nomination of Nationalist Congress Party MLA Dilip Sopal as chairman claiming the corporation needed a professional to run it at this juncture.

This has embarrassed the government no end as this is perhaps the first time that a government-nominated chairman is being rejected by the board of directors.

The state-run corporation has 12 directors on board and includes those who were nominated by the previous Sena-BJP alliance. The initiative to throw out Sopal was taken by former Sena minister and sitting MLA Radhakrishna Vikhe-Patil. Vikhe-Patil has been elected to the board by the shareholders of MSFC. Significantly, three government officers on the board did not attend the meeting.

The resolution rejectig the government's fiat was moved by Eknath Thakur, who represents banks and insurance companies. It was seconded by Vikhe-Patil. Addressing the directors in the board meeting, Thakur pointed out that the MSFC was passing through financial crisis. As such, the government should have sought the opinon of the board and nominated an expert from the field instead of a politician. Vikhe-Patil said Sopal was his personal friend but he had a duty to perform towards the shareholders who had sent him to the board.

The board meeting was presided over by N D Kamble, representative of the cooperative banks on MSFC board.

One director told this newspaper that the board turned down the government's recommendation invoking section 50 of the State Finance Corporations Act which sets out that the government should nominate the chairman in consultation with the board of directors. ``The nomination was rejected as we did not want a politician as our chairman. The professional management of the corporation has brought down its losses from Rs 32 crore to Rs 7 crore in a year. This will not be possible with a politician as our head,'' he said.

The government probably has no alternative but to dissolve the present body. However, the director said it was not possible since the board had directors nominated by the financial institutions like IDBI and SIDBI as well as elected representatives of the shareholders. Further, some of the directors may approach the courts if such a decision was taken.