The withdrawal of Ms Aruna Bagchi and Mr S Behuria, who are serving officials in the ministry of mines, is part of the reconstitution of the board of Nalco, sources said, adding that the rearrangement was on the ground that directors could not be on the board of two companies, which have conflicting interest.

As part of the Nalco board reconstitution earlier this month the government replaced join secretary (mines) Ms Aruna Bagchee and financial advisor (mines) Sutanu Behuria by nominating additional secretary SC Tripathi and joint secretary SP Gupta, both from the ministry of mines.

Balco shareholders agreement, stipulates that the non-executive directors to be appointed by the government, should not be employed in the capacity of director of any other company engaged in any activity or business directly, in competition with it.

Balco, where government sold 51 per cent equity to Sterlite industries for Rs 551.5 crore on March 2, is a major player in the aluminium business, directly competing with Nalco.