Ethics Panel Member Was On TFL Board

Mumbai, Aug 29: | Updated: Aug 30 2002, 05:30am hrs
Tata Sons director JK Setna, who was on the erstwhile board of Tata Finance Ltd (TFL), was, and still is, part of the two-member Central Ethics Committee of the Tata group.

As reported earlier by FE, the Central Ethics Committee, which is said to be above even the group chairman if the situation so demands, did not feel the need to look into the TFL affair.

The erstwhile board, which resigned en masse accepting moral responsibility for the TFL imbroglio, included Mr Setna, Dr Fredie A Mehta, Mr KN Suntook, Mr JE Talaulicar, Mr Dilip S Pendse, Mr VM Raval, Mr BL Passi, Mr B Ramakrishna, Mr BA Suvarna and Mr Kishore A Chaukar.

Sources had earlier raised the query as to why the committee, which is headed by prominent group officials, did not take action, without the need for an invitation, in view of the seriousness of the issue and the repurcussions thereof.

Asked whether Mr Setnas presence on the board of TFL during the crisis in the company was a contributing factor in the Ethics Committee not investigating the affair, spokespersons for the Tata group declined comment.

FE had earlier reported that the Central Ethics Committee, comprising Tata Sons executive director and Group Executive Office (GEO) member R Gopalakrishnan and Mr Setna, was set up to review any ethical breach of conduct within the group.

A spokesperson for the Tata group had responded stating: Yes, there is an Ethics Committee, which consists of Mr Gopalakrishnan and Mr Sethna. The Ethics Committee only looks into matters after receiving a request from the board of directors of any company.

The board of directors of a company refers any matter only if it is unable to resolve any issue pertaining to the company or in case of a matter relating to the managing director of that company. In this (i.e. TFL) case, the Ethics Committee was not called in because the previous board of directors was able to resolve certain issues relating to TFL before stepping down; taking constructive moral responsibility of the developments, the spokesperson had added.

The spokesperson had stated, Immediately after that, the new board of directors was inducted, which is currently looking into all relevant matters.