4 of 5 independent directors leave sinking Kingfisher

Crisis in the sky deepens,more trouble for ailing Kingfisher Airlines

In less than seven months,four of five independent directors on the board of Kingfisher Airlines have abandoned the carrier,deepening the leadership crisis at the cash-strapped airline. Among those who have left is a former chief of markets regulator Securities and Exchange Board of India (Sebi),G N Bajpai.

In a filing to the Bombay Stock Exchange (BSE) Wednesday,the company admitted that former tennis ace Vijay Amritraj has resigned from the board due to personal reasons.

Diwan Arun Nanda,the founder of rediff.com,quit in September 2011. Retired IAS officer Piyush Mankad too has left in the past six months. The company is yet to accept the resignations of Bajpai and Mankad,however.

When contacted,Bajpai confirmed he has quit. I am confined due to health reasons. I resigned from Kingfisher long ago, he said in a text message,declining to elaborate.

The strength of the Kingfisher board is now down from eight to four. Institute of Chartered Accountants of India (ICAI) member Anil Kumar Ganguly is the lone remaining independent director. Chairman Vijay Mallya,vice-chairman Subhash Gupte,and president and chief financial officer A K Ravi Nedungadi are the remaining directors on the board. Repeated queries to Kingfisher on the matter remained unanswered.

In a sinking ship,the first people to quit are the independent directors, Prime Database CMD Prithvi Haldea said. It was seen after the Satyam scam,mass resignations followed as people were not sure whether they can trust the company. The issues of bad loans and recovery proceedings become a liability for them. There is a big question mark on the due diligence. Their role in the board meetings comes under the scanner,even though they are hardly independent and have no stake in the company, Haldea added.

As per the listing agreement signed with BSE and NSE,Kingfisher is required to have at least 50 per cent independent directors on its board. The airline will have to induct at least two independent directors within six months of accepting the two pending resignations.