The Hindu Business Line

Regulator tells CDSL board to decide soon on new chairman

Depository schedules meeting on April 8

- PALAK SHAH

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.

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