The Hindu Business Line
Regulator tells CDSL board to decide soon on new chairman
Depository schedules meeting on April 8
With the CDSL board failing to take a decision on the appointment of a new chairman, market regulator SEBI has asked the company to come clear on the issue. The company’s Chairman TS Krishnamurthy was supposed to retire in March on attaining 75 years of age, the maximum limit up to which a public interest director can serve on a listed company’s board, according to SEBI guidelines. However, with the company board yet to decide on the new possible candidates, Krishnamurthy continues to hold the post.
After a nudge from SEBI, CDSL, India’s second-largest share depository will hold a board meeting on April 8 to decide on a new chairman. “Following a complaint from one of the directors, the market regulator wrote to the company this week,” sources told BusinessLine.
According to SEBI norms, board members should suggest possible names to replace the retiring person at least two months ahead of any members’ term coming to an end. But no names to replace Krishnamurthy were suggested by the CDSL board.
Krishnamurthy is now a caretaker chairman till another chairman is appointed, one of the board members told BusinessLine.
The last board meeting of CDSL was held on March 26 in Chennai and was attended by Krishnamurthy. The matter with regard to suggestion of two names was deferred, sources said. Yet, one board member claimed there were minutes of the board meeting which showed there were discussions on names of two senior bureaucrats to be appointed as directors in place of Krishnamurthy.
Outsider not in favour
There are a few directors on the board of CDSL whose terms end in July, but are eligible for re-appointment. One CDSL board member has proposed that an existing board member be considered for the post of chairman rather than inducting an outsider. BSE has two of its shareholder directors on the board of CDSL and they are seeking clarity on the role of directors and chairman before things move ahead, the sources said.
PS Reddy, the MD & CEO of CDSL, too resigned on March 31, as he became MD & CEO of MCX. Whoever is the new CDSL chairman will be key in appointing the MD and CEO of CDSL. The names of former senior bureaucrats Sudhakar Rao, DK Mittal and former SBI ED Pratip Kar may be suggested by CDSL to SEBI. RM Malla, former chairman of IDBI and current CDSL board member, is an internal candidate whose name could be suggested for the chairman’s post, the sources said.
CDSL did not reply to two email queries. SEBI did not reply to an email query. Malla did not reply to phone calls and WhatsApp messages. Krishnamurthy declined to comment.