New Delhi, November 23, 2021: Air India’s board members were asked to resign last week and they are expected to do so at their last meeting next month before Tata Sons are likely to take over the airline in January, people aware of the matter said.
Tata to pay $2.4 bln for troubled Air India.
Tata Sons will take charge of Air India after a winning bid of $2.4 billion, including equity and debt, the government said on Friday, marking the end of years of struggle to privatise the financially troubled airline. Francis Maguire reports.
“Seven board members have been asked to resign. These include four functional directors, two government nominee directors, chairman, and managing director (CMD). The board of directors have to resign… (before the transfer of control) takes place after the (last) board meeting of Air India,” said an airline official, requesting anonymity. He added the board members were asked to resign at a meeting on November 15.
A second airline official said the last board meeting is expected to be held in the second or the third week of December after which all the seven directors will resign. “This will include the ruling party (Bharatiya Janata Party)’s Syed Zafar Islam, the non-official director of the airline,” said the second official, who did not wish to be named.
The government picked up Tata Sons as the winning bidder for the debt-laden state-run Air India in October around 70 years after its nationalisation. Air India was founded in 1932 as Tata Airlines according to the reports published in hindustantimes.com.
C S Subbaih, a former chief executive officer of Alliance Air, said the resignations are a formality and a requirement and send a positive signal to the new owner that the process is on time and they will take control as per their plans. “New board has to take over as Tata Sons are the new owner of the airline. The current board is such that there is a CMD and government directors and functional directors who all will have to quit.”
Subbiah said the new board might have an independent director and will have professionals with experience at the international level. “The new owner might not have functional directors unlike the current board and might have more owners’ representatives, independent directors, and an independent chairman and managing director. Tatas will bring in professionals to avoid mistakes of the past…it might even appoint an independent finance expert…”
Air India spokesperson did not respond to HT’s query.
