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In his letter to minister Vayalar Ravi, Mahindra has sought permission to quit the board, giving ‘conflict of interest’ as the reason for his action. “I have sent a letter to the aviation minister requesting him to allow me to step down from the Air India board. The Bangalore Aero Show 2011 has thrown up business opportunities for M&M, which is a potential conflict of interest and throws up questions of good board practice. Hence my request,” Anand Mahindra said on Monday.
M&M had acquired 75.1 per cent each in two Australian aerospace companies, Aerostaff Australia and Gippsland Aeronautics, for Rs 175 crore in 2009 and planned to make aircraft and allied components to service the global market.
“We are developing the capability to supply components to major suppliers from where Air India sources its aircraft. I just felt that it would be of highest standard of corporate governance to submit my resignation and avoid any conflict of interest,” he said.
The ministry in March 2010 had appointed five independent board directors. They are Ambuja Realty chairman Harsh Neotia, Ficci secretary-general Amit Mitra, former air chief marshal Fali H Major and Emke group’s Yusaffali MA, besides Mahindra.
According to airline officials, the main reason for Mahindra’s offer of resignation is the conflict with the Air India chairman and MD and independent board members. “There have been many instances where the independent board has complained of not being consulted on major decisions. They have been unhappy with the overall functioning of the board,” an Air India official, who did not want to be named, said.
According to another official, other independent members may follow suit. Ambuja Reality’s Neotia declined to comment.
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