Himachal Fertilizer Company

Presented by,
Somil Gupta – 19S646
Srishti Taneja – 19S647
Suraj Rarath – 19S648
HFC Board
HFC Board

Investment
Logistic Division Others
Committee

Mr. Anil Nair Mr. Neil Shah

Mr. George Mr. Surendra
(Non- Executive (Non- Executive
Mathew Rawat (Director
Independent Independent
(Director) Finance)
Director) Director)
Mr. Neil Shah – Independent Director
(Non- Executive)
• Chartered accountant with over two decades of corporate board experience.

• Post-retirement advised companies on issues connected with strategy and

governance from his office located in Mumbai.

• Inducted into the HFC board as a non-executive independent director following

widespread reforms in corporate governance.

• He Chairs the audit and ethics committee of the HFC board and is also a part of
investment committee.

PK
Case Synopsis
• Two bidders for the tender for handling Naphtha for HFC : Indian Port Limited (IPL) and Bharat
Ports Limited (BPL).

• Mr. Paul Joseph, GM of IPL made serious allegations about malpractices in the bidding process and
requested an informal meeting with Mr. Neil.

• Mr. Neil, though unsure about meeting Mr. Paul, eventually agreed to the same.

• Information that might have significant bearing on the bidding process was conveyed to Mr. Neil.
Time Series of events:
March,12-HFC floated tender

Bidders were given 4 weeks to submit bids

April 14,2012-5:30pm bidding deadline closes

April 15,2012 10am- Paul Joseph calls Mr.Neil alleging

irregularity in bid

April 15,2012 10:30am- Meeting started with paul stating

about change in time of bid deadline in a very short
noticeand bias that happened

Neil’s Dilemma !!!! What to do

April 20,2012-Investment Committee meting

CAPITAL GOVERNANCE

• Independent director shall be commited to values ,about ethical

business conduct and about making a distinction between personal
and corporate funds in the management of company.
Code of Conduct at HFC

• An independent director shall:

 Not violate the code of conduct as stipulated by the company(posted on company’s website.

 Shall be held liable for any acts of immission or commission which have occurred with his

knowledge or consent or where he has not acted with respect to the provisions as contained in

the agreement.
Code of Conduct at HFC
• Broad standards of compliance were laid down as required by Clause 49.

• The ethical conduct section required officers and directors to:

o Fulfil fiduciary obligations without allowing compromise of independence of judgement.

o Act fairly and transparently and not participate in matters which would likely lead to Conflict
of Interest.

o Not engage in any business , relationship or activity with parties in transaction to the
Company.

o Avoid dealings with contractor or supplier that compromise ability to transact business
professionally, impartially and competitively, or influences decisions to be made by the
Company.
Course of Action
• Should have insisted on
E-mail written complain via email.

• Stop the bidding process

Halt Bidding till the allegation is
investigated

Board • Arrange for a board meet to

Meeting discuss the allegation

• Set up an internal
Investigation
committee to look into
Committee the allegation
Thank you!