Close on the heels of the Comptroller and Auditor General's (CAG) report on losses to the government on the allocation of coal blocks to private companies, a foreign investor in Coal India Ltd (CIL) has started a campaign against the management of the company for alleged violation of corporate governance issues.
The Children's Investment Fund (TCI), the largest foreign fund investing in CIL, has raked up the issue of coal pricing by CIL and has sought details of how the company detracted its decision to hike coal prices under government pressure.
TCI has now sought a change of management at the state-run coal miner and has written to the secretary of the coal ministry, saying the company ''lacked necessary leadership to develop operationally.''
''It is time for the board to hold the management accountable, or for the board and management to be swiftly changed. As the largest shareholder in CI, you should, like ourselves be striving to see the company performs to world-class standards. This is clearly not happening and we urge you to increase the pressure on the board and management to deliver results on operational performance,'' TCI said in its letter.
Chris Hohn, chief investment officer of The Children's Investment Fund, had also written to the CIL management accusing it of disregarding the interests of minority shareholders by not raising coal prices.
The UK fund now says an e-mailed statement from CIL in response to the fund's letter asking for details on why it dropped plans to raise coal prices at the behest of the government of India, its largest shareholder with 90 per cent equity stake, was not satisfactory.