New Delhi: Even by the standards of unusual and irrational appointments in state-owned companies, the story of Satnam Singh, former chairman and managing director of state-owned Power Finance Corp. Ltd (PFC), is a curious one.
Singh was denied an extension after his term ended on 31 July, in the backdrop of a recalled order from the appointments committee of the cabinet (ACC) and ongoing vigilance inquiries. M.K. Goel, director (commercial) at India’s largest lender to the power sector, got the charge of chairman and managing director on Friday.
A news report in the Economic Times paints the picture of an efficient bureaucrat undone by his political masters, but surely, there’s more than that?
Mint reported on 31July about vigilance inquiries against Singh, with the thrust of the complaints against him pertaining to loans extended to wind-turbine maker Suzlon Energy Ltd, which received around Rs.800 crore from PFC to refinance existing debt, and to Videocon Industries Ltd. Another complaint has also been made by an entity called PFC Officers Association.
Indeed, in what many term as an exception, the ACC headed by Prime Minister Manmohan Singh issued an order to the power ministry, the parent ministry of PFC, on the afternoon of 5 September asking for Singh’s removal, but immediately recalled it.
“The ACC order had come after the power ministry had written to it (ACC) asking for denial of Satnam Singh’s extension. It was found that there was some merit in the complaints against him,” said a senior power ministry official requesting anonymity due to the sensitive nature of the issue.
“Interestingly, as soon as the ACC order was received, it was recalled. It’s rare for the ACC to withdraw an order after issuing it,” added the first power ministry official quoted above.
The recall of the order seems to suggest, as some in New Delhi’s power circles have maintained, that Singh had the backing of someone high-up in the government.
Then, on 13 September, ACC issued a fresh order that agreed with the power ministry’s opinion that Singh not be granted an extension. He was out soon after.
Meanwhile, as Mint reported on 31 July, the Central Vigilance Commission (CVC) is investigating the allegations. To be sure, the launch of inquiry itself is no evidence of any wrongdoing.
Another senior power ministry who also didn’t want to be identified tried to play down the issue and said, “If the order was retracted, it means it never came.”
Singh didn’t immediately respond to phone calls seeking comment on Monday morning. A message left on his cell phone also remained unanswered.
In the case of reappointments, the parent ministry (in this case, the power ministry) sends its recommendation to the ACC through the department of personnel and training and asks CVC, which oversees the work of state agencies and companies, for a fresh background check on the candidate. The Public Enterprises Selection Board oversees hiring for state-owned firms.
Singh began his five-year term as chairman and managing director of PFC on 1 August 2008. In the last fiscal, PFC, which has a loan book of Rs.1.6 trillion, sanctioned Rs.75,147 crore and disbursed Rs.45,151 crore.