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Indians to dominate privatised A-I board; Esops for staff

The Indian government said on Wednesday that it wanted two-thirds of the board of Air-India to be made up of Indian nationals after the international carrier is privatised.

Divestment Minister Arun Shourie made the announcement to reporters as he said the privatisation panel had approved a draft shareholders' agreement for selling a 40 per cent controlling stake in the money-losing airline.

"Two-thirds of the board should be made up of Indian nationals at all times. The chairman and managing directors shall always be Indians," Shourie said after the meeting of the panel headed by Prime Minister Atal Bihari Vajpayee.

Shourie also informed that the employees' stock option plan had been okayed for the Air-India staff.

The divestment minister said that any wrong declaration of sources of revenue by the strategic partner for Air-India would be considered as default.

There are only two bidders in the race for the airline. Singapore Airlines has teamed up with the Tatas, one of India's largest industrial groups. The second bidder is Madras-based truck and bus-maker Ashok Leyland controlled by the British-based Hinduja brothers.

The government also announced that it had approved a plan to hive off petroleum retail marketing company IBP's stake in packing and lubricants subsidiary Balmer Lawrie into a shell company as part of a move to ready IBP for sale.

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