Security nod given to appoint director in Kingfisher: High Court

New Delhi, Aug 5 : Decks have been cleared for appointment of a second director to the board of the ailing Kingfisher Airlines which currently has only Vijay Mallya at the helm, the Centre today informed the Delhi High Court. The Ministry of Civil Aviation told a bench of justice Vibhu Bakhru that the Ministry of Home Affairs has given security clearance to advocate Lalit Bhasin in order to appoint him as a director.

Kingfisher had moved the high court saying its March 2012 plea seeking security clearance for Bhasin has been pending, subsequent to which the Centre was asked why no decision had been taken on the airline’s application. In view of the submission made by the Centre, the court disposed of the plea of the airline. It also set aside the respective orders of the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) imposing penalties upon the airline for non-compliance of the conditions of the listing agreement.

It asked Kingfisher to move the stock exchanges for waiver of the penalty and directed the stock exchanges to consider the matter afresh subject to the condition that the airline complies with listing conditions within two weeks. As per the airline’s petition, filed through advocates Diwakar Maheshwari and Ajay Bhargava, it had received letters from BSE and NSE June this year, saying the airline is liable to pay a fine of Rs 61,798 and Rs 84,270 respectively for non-compliance of listing conditions and as per a circular of Securities and Exchange Board of India (SEBI).

As per SEBI’s September 30, 2013 circular, all stock exchanges have been asked to impose penalties for non-compliance of listing conditions, including submitting of quarterly financial results. The airline had contended that it has not been able to constitute a Board of Directors or submit its quarterly financial results for the quarter which ended on March 31, 2014 as its application seeking clearance to Bhasin had been pending and had claimed that it should not be penalised for the same.