S Narsing Rao, a 1986 batch Andhra cadre IAS officer, was appointed as the Chairman and Managing Director of Coal India on April 24, 2012.
The appointment came more than a year after the last full-time chairman retired.
Come June and India’s national miner may once again be headless as Rao may become principal secretary to K Chandrasekhara Rao, who will be the first Chief Minister of the newly created state of Telangana.
While Narsing Rao has merely confirmed “the possibility” and the “proposal”, sources say the CIL chairman was handpicked by the Telangana CM for the most influential position in thr administration.
“Rao will practically enjoy a free hand in administration,” a source told Business Line . He is expecting the new government at the Centre to relieve him of his responsibilities at CIL in the next two weeks.
The switchover would come at a cost as Rao would receive less pay. He may also miss the national and international clout as the chief of world’s largest coal miner. But, in the final analysis, sources say, he responded to the emotional attachment to his homeland. The 56-year-old Rao hails from Medak, the same constituency that elected the Telangana Chief Minister-to-be.
The investor community, which found a capable leader in Narsing Rao, reacted negatively to the development as is evident in the nearly 5.9 per cent drop in CIL’s share price to ₹366.70 on the BSE on Tuesday. He had taken charge of the company at a crucial juncture, when the CIL board was at loggerheads with the former UPA government on FSA (fuel supply agreement) commitments, on the back of negligible production growth.
To his credit, Rao was successful in bringing CIL back on the growth path in 2012-13, his first year in the job. Though production growth slowed down in 2013-14, the crucial decision of diluting the company’s huge pit-head stock ensured adequate supplies to power stations and helped CIL’s balance sheet.
“His focus on domestic production and evacuation infrastructure was timely,” a Singapore-based fund that has recently taken interest in the CIL stock told Business Line .
Investors are particularly wary about the imminent headless status of CIL. Going by the track record, the Government might take months or years to fill the vacancy. Till then, either an additional secretary in the coal ministry or a full-time director on the board might hold the additional charge.
Among the existing full-time board members, R Mohan Das, Director, Personnel and Industrial Relations, is senior-most. However, there is precedence (as in South Eastern Coalfields Ltd and Northern Coalfields Ltd) of awarding temporary charge to relatively junior board members.