CAG flags TN state firms for missing woman directors, Rs 49,756-crore revenue arrears
Chennai, Sep 8 (PTI) Tamil Nadu government-owned companies have failed to ensure mandatory representation of a woman director on their boards, while various state departments are sitting on uncollected revenue totalling Rs 49,756.18 crore, according to two CAG reports tabled in the state Assembly on Tuesday.
Three Tamil Nadu government-owned companies had no woman directors on their boards despite statutory requirements, a CAG of India report said.
The three companies were Tamil Nadu Generation and Distribution Corporation Limited, Tamil Nadu Electricity Board and Tamil Nadu Arasu Cable TV Corporation Limited, the report said.
The Compliance Audit on State Public Sector Enterprises for the period ended March 2023 found that TANGEDCO, TNEB and TACTV had failed to ensure the mandatory representation of a woman director on their boards.
Section 149(1) of the Companies Act, 2013, read with Rule 3 of the Companies (Appointment and Qualification of Directors) Rules, 2014, mandates that every public company with a paid-up share capital of Rs 100 crore or more, or an annual turnover of at least Rs 300 crore, appoint at least one woman director to its board.
The Comptroller and Auditor General of India noted that the three state-owned companies met the qualifying criteria but had not complied with the requirement.
The audit pointed to wider corporate governance deficiencies among the state's public sector enterprises.
Of the 82 working SPSEs evaluated, several had not complied with regulatory requirements relating to board composition and oversight.
The CAG found that 16 SPSEs did not have the required number of independent directors, with 15 of them having no independent director on their boards.
It found that 13 state enterprises had failed to hold the mandatory minimum of four board meetings during 2022-23, while six had allowed the interval between consecutive meetings to exceed the prescribed limit of 120 days.
Additionally, 16 state enterprises had failed to establish a statutory vigil mechanism, which provides a channel for employees and directors to report fraud or unethical practices.
Key managerial personnel vacancies remained unfilled for more than six months in seven enterprises, in violation of guidelines issued by the state Bureau of Public Enterprises.
Separately, a CAG report on state revenues for the period ended March 2024 highlighted significant gaps in the state's revenue recovery mechanisms.
It found that total revenue arrears under various principal heads stood at Rs 49,756.18 crore, of which Rs 24,643.69 crore, or more than half, had remained outstanding for over five years.
The transport and police departments accounted for significant portions of the outstanding dues.
The audit found lapses in enforcing penalties and collecting motor vehicle taxes. In the transport department, 237 "large tax defaulters" collectively owed Rs 68.45 crore. Regional Transport Offices failed to blacklist 195 of these major defaulters despite the outstanding dues.
The state's e-challan system failed to ensure effective collection of traffic fines.
According to the CAG, Rs 1,299.72 crore in traffic fines issued by the police department remained pending collection.
The report cited the case of a goods vehicle that was issued 1,188 challans over five years. These included 379 challans for dangerously carrying people on running boards or coolies on top of the vehicle.
Despite the violations, the jurisdictional RTO renewed the vehicle's fitness certificate in March 2024 and allowed it to pay its annual motor vehicle tax without checking its compliance record, the report said.
The CAG emphasised that the tax and penalty framework would be ineffective without strict enforcement.
It said failure to recover the dues not only undermined the deterrent effect of traffic fines but also affected the state's Road Safety Fund, which receives 50 per cent of compounding fee and spot fines for implementing road safety measures.
The CAG urged the government to prioritise the recovery of outstanding dues.
(With inputs from PTI)
