New Delhi: A Parliamentary Committee has flagged serious corporate governance shortcomings at Indian Rare Earths Limited (IREL), a state-run company under the Department of Atomic Energy (DAE), citing prolonged vacancies at the top management and board levels. The observations were made by the Committee on Public Undertakings (CPU) in its Action Taken Report recently tabled in Parliament.
CMD Post Vacant for Over a Year
The committee noted with concern that IREL has been functioning without a regular Chairman-cum-Managing Director (CMD) for more than a year. The post has remained vacant since November 30, 2024, following the superannuation of the former CMD Sarda Bhushan Mohanty.
Since then, the Director (Finance) has been holding the charge of CMD on an additional basis, a situation the panel said is far from ideal for a strategically important Central Public Sector Enterprise (CPSE).
ACC Approval Delays Stall Appointment
The CPU pointed out that the Public Enterprises Selection Board (PESB) had already conducted interviews and recommended a candidate for the CMD position. However, the appointment could not be finalized as the Appointments Committee of the Cabinet (ACC) is yet to grant approval.
The panel observed that the delay in ACC clearance has resulted in prolonged leadership uncertainty, adversely affecting decision-making and long-term planning.
All Independent Director Posts Lying Vacant
Adding to the governance concerns, the committee highlighted that all four non-official independent director positions on IREL’s board are currently vacant. As a result, the board’s effective strength has been reduced to six members against a sanctioned strength of twelve.
The absence of independent directors significantly weakens the board’s oversight mechanism, the committee noted.
Violation of DPE Guidelines
The CPU further observed that the situation violates Department of Public Enterprises (DPE) guidelines, which mandate that at least one-third of the board members of unlisted CPSEs must be independent directors.
With no independent directors currently on the board, IREL is in clear non-compliance with established corporate governance norms applicable to CPSEs.
DAE’s Response Termed ‘Interim’
In its response, the Department of Atomic Energy informed the committee that it has taken up the matter of appointing independent directors with the Department of Public Enterprises and that efforts are underway.
However, the parliamentary panel dismissed this explanation as merely an interim response, stating that it does not address the seriousness of prolonged vacancies at both leadership and board levels.
Strategic Importance Heightens Concern
The committee underscored that these governance gaps come at a critical time when IREL is executing strategically vital projects in the rare earth and atomic minerals sector, which are crucial for national security, clean energy, and advanced manufacturing.
“Prolonged vacancies at both leadership and board levels undermine corporate governance principles and weaken institutional oversight,” the panel remarked in its report.
About IREL
IREL (India) Limited, formerly Indian Rare Earths Limited, is a Mini Ratna Category-I Central Public Sector Undertaking under the Department of Atomic Energy, according to IREL (India) Limited. It is primarily involved in the mining of mineral sands and the production and sale of heavy minerals and rare earth compounds. The company was incorporated on August 18, 1950. IREL extracts and processes minerals like Ilmenite, Rutile, Zircon, Sillimanite, and Garnet from beach sand deposits. They also produce Rare Earths Chloride and associated products.
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