From the regulator’s high table to the company’s boardroom: India Inc’s award selection


While India Inc has retired public servants on its boards, regulators are its biggest asset.

Registers of the Companies Register and the Ministry of Commercial Affairs reviewed by Indian express show that over the past 11 years, at least six heads of senior regulators and two senior partners have served as directors in private companies in their regulatory field, raising questions of ownership and conflict of ‘interests. In some cases, even the standard on the cooling-off period has been accepted.

Among major regulators, the Securities and Exchange Board of India’s (SEBI) supervisory markets have a one-year delay before its chairman or full-time member can accept another job after his or her tenure. The Reserve Bank of India also has a one-year cooling-off period for its governor and deputy governors.

Members of the Indian Competition Commission’s antitrust watchdog cannot accept, for two years after their term of office, employment related to a company that has been the subject of proceedings before it.

As for the Insurance Regulatory and Development Authority of India (IRDAI), the chairman or full-time members cannot accept employment in central or state governments or any company in the insurance industry during a period of two years after their mandate.

Now consider an illustrative compilation of leading regulators and associates who have joined boards of directors of companies related to their regulatory area:

TS Vijayan: Head of IRDAI from February 21, 2013 to February 20, 2018. Held several board positions during the two-year chill period: Muthoot Microfin (May 15, 2018 to date); Nippon Life India Trustee (from June 29, 2018 to January 28, 2020); Shriram Properties (November 2018 to present).

Muthoot Microfin is a subsidiary of Muthoot Fincorp, which operates in insurance brokerage through its subsidiary Muthoot Risk Insurance and Broking Services. Nippon Life India Trustee, formerly known as Reliance Capital Trustee Co Ltd, is a subsidiary of Nippon Life Insurance Company (Japan). Nippon Life Insurance owns a 49 percent stake in Reliance Nippon Life Insurance Company.

Also joined the boards of Bajaj Allianz Life Insurance and Bajaj Allianz General Insurance on April 1, 2020, but left the seats on July 17, 2020.

In August 2020, Vijayan received a show cause notice from the Center as to why he joined the board of Yes Bank in December 2018, allegedly without getting approval – he was with Yes Bank until March 5, 2020.

Vijayan said: “None of the companies I joined are in the insurance industry.”

Ashok Chawla: Led CCI from January 2011 to January 7, 2016; retired as Finance Secretary in January 2011. Within two months of leaving CCI, joined the Yes Bank board as a non-executive director on March 5, 2016; seven months later became president of the bank. Resigned in November 2018 after being named in a CBI indictment sheet on alleged corruption charges.

In April 2018, joined the board of directors of Jet Airways. In November 2015, under Chawla, the ICC fined three airlines, including Jet, for violating antitrust regulations. Jet Airways was penalized by Rs 151.69 crore, the highest of the three. In March 2018, on appeal, the ICC reduced Jet’s penalty to Rs 39.8 crore – the penalties for the other two were also reduced.

Joined the Board of Directors of the National Stock Exchange on March 28, 2016, and later appointed Chairman.

Was a member of the board of directors of Reliance Nippon Life Insurance Company from March to September 2018. On February 3, 2016, almost a month after his retirement from CCI, the regulator authorized Nippon Life to increase its stake in Reliance Life Insurance at 49%.

Chawla said: “I left my post as President of the ICC in January 2016. As I had already retired from the government in January 2011, the one-year cooling-off period did not apply to me. I was subject to section 12 of the Competition Act where I could not be bound for two years to the management of any company, which had been party to proceedings before the ICC. As it was not attracted in any of the cases, I was not prevented or conflicted from serving on the board of directors of NSE or Yes Bank. “

He said: “Also, a stock exchange and a bank are regulated entities – the first by SEBI and the second by the RBI. As such, appointments to their boards require specific approval from the regulator. My appointments only took effect in 2016 after NSE and Yes Bank applied for and received approval from SEBI and RBI, respectively. There was nothing in my role as president of the ICC, and before that as financial secretary, that put me in direct conflict with my role as director in these organizations.

British Sinha: Chairman of SEBI from February 18, 2011 to March 1, 2017. Joined the board of directors of Samitra Research and Consulting (January 10, 2018) before the end of the cooling-off period – the company has since been delisted.

Joined the Board of Directors of Havells India (March 1, 2018), Vedanta Ltd (March 13, 2018), HDFC Limited (April 30, 2018) and Aavishkar Venture Management Services (May 2018). Joined the board of directors of the Max Healthcare Institute, which was listed in August of last year, in June 2019.

Sinha declined to comment.

Urjit Patel: Governor of the RBI from September 4, 2016 to December 11, 2018. Joined the board of directors of the major shipping company Great Eastern Shipping Company on August 1, 2020. Joined the boards of directors of Britannia Industries (March 31, 2021) and by John Cockerill India Ltd (April 1, 2021).

Patel did not respond to requests for comment.

Dhanendra Kumar: Head of CCI from February 28, 2009 to June 5, 2011. Founded a company, Competition Advisory Services, on October 13, 2011 and is its Managing Director.

The company, according to its website, offers “a specialized consultancy and consultancy firm, providing expert and strategic assistance in the areas of competition law, regulatory and government policies and market entry strategies.”

Kumar’s profile on the website says that after his retirement he “headed the expert committee charged with developing the draft national competition policy and proposing changes to the 2002 competition law.” ; and chaired “the Committee of Experts of the Ministry of Housing to propose regulatory reforms in the real estate and housing sector”.

Kumar said: “I am abroad, I cannot answer in detail, but all the rules have been followed.”

Sudhir Mital: joined CCI as a member on April 11, 2014, retired as interim president on November 9, 2018. Joined Hindalco’s board of directors on November 11, 2019.

In 2018, as a member of the ICC, he was part of a bench that issued an order in a 2015 case against the company AV Birla UltraTech Cement for allegedly withholding information during an acquisition of assets of cement from Jaiprakash Associates.

CCI noted that Kumar Mangalam Birla and his family (KM family on file) held a substantial stake in two other cement companies, Century Textiles and Industries and Kesoram Industries, which was not transferred to CCI. The KM family also held 34.59% of the shares of Hindalco, the ICC noted. He penalized the KM family Rs 50 lakh for allegedly withholding information.

As a member of ICC, he sat on the bench reviewing nine other cases involving Jaiprakash Associates, one of which also included UltraTech Cements. On November 7, 2020, two days before the end of the cooling-off period, joined the board of directors of Jaiprakash Power Ventures Ltd, a subsidiary of Jaiprakash Associates.

Joined a limited liability company, Kisco Business Center, on December 27, 2018 as a designated partner, less than two months after his retirement.

Mital did not respond to requests for comment.

Rama Subramaniam Gandhi: retired as RBI Deputy Governor on April 2, 2017; the oversight area included payment systems, informatics, the Department of Banking Operations and Development, and the Department of Non-Banking Supervision.

According to RoC records, he joined the board of directors of Jana Small Finance Bank on March 21, 2018. He resigned in May 2019, he continues as a senior advisor. In June 2018, he joined as an advisor to electronic payments giant PayTM and director of Electronic Payment and Services Pvt Ltd, which describes itself as a provider of retail banking technologies.

Gandhi said: “I didn’t join any board until I completed the one-year cool-down. I joined Jana SFB in May 2018 and at the May 2018 meeting only my appointment as a director was approved. As Governor of Dy, I had managed, among other things, functions related to the regulation of banks and payment system entities. I do not consider that the management of any of these functions conflicts with my role as director in these companies after a one-year hiatus.

Anand Sinha: retired as RBI Deputy Governor on January 18, 2014; was in charge of the regulation of commercial banks, non-bank financial corporations, urban cooperative banks and IT.

Joined the board of directors of IDFC Bank (now IDFC First Bank) in August 2016. RBI had granted an “in principle” banking license to Infrastructure Development Finance Co in April 2014, three months after Sinha left.

Joined the board of directors of KKR ARC Ltd, the asset reconstruction arm of global investment firm KKR, in December 2016. Member of the board of directors of the GST network since June 2016.

Sinha said: “I joined the IDFC bank board at their request long after I retired from the RBI and as such, in my opinion, there was no conflict of interest. The bank would have benefited from my expertise to better understand and appreciate the regulatory requirements and the spirit of the regulations leading to better compliance with the requirements.


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