FIs remove two nominee directors from L&T board

11 May 2007

Mumbai: Life Insurance Corporation and General Insurance Corporation have taken off their nominee directors, Kranti Sinha and B P Deshmukh, from the board of construction major Larsen & Toubro. This is on the grounds that the two failed to comply with a directive given on June 2006 to not exercise the employee stock options (Esops) granted by the company.

DK Mehrotra, managing director of LIC, would replace Sinha as LIC''s nominee, financial institutions sources said. The identity of the new GIC representative on L&T''s board is not yet known.

Deshmukh, who has been on L&T''s board since 2002, said he had written to GIC to relieve him of his duties six months ago. Sinha, on the other hand, had joined the L&T board in 2003 following his retirement from LIC Housing Finance as its chief executive officer.

Both were inducted as "independent" directors, representing the equity exposure of LIC and GIC in L&T.

Both GIC and LIC refused to comment, saying the matter is sub-judice.

The two financial institutions have even moved the Bombay High Court to bar its nominee directors from dealing with these shares. The Bombay High Court has restrained GIC nominee-director Deshmukh from transacting in L&T stock option shares till June 13.