As a senior Tata Group leader, drafter of the companies Bill 2009 and a renowed professional, Dr JJ Irani needs no introduction to those tracking the Indian financial sector. His practical and professional corporate governance experience made him perform a due diligence on Everonn and convince himself of its business mode, before he accepted an independent director's position. I'd blogged earlier(http://thescambuster.blogspot.com/2011/07/independent-directorsauditors-not.html) on this phenomenon of independent directors fleeing scam hit companies in droves. In case of Dr Irani, it is even more perverse than described in that post because
- As a chartered accountant, he's well equipped to appreciate and assess the merits and issues of the tax case and guide the company
- While directors are not bound to stick with the company through 'thick and thin', it makes no sense to appoint a director who will abandon you at the first sign of distress.
- Unlike Satyam, the business model is not in dispute here, only the management integrity is.
- By resigning, he has made it worst for the company when it needed the support of other investors the most. Now, even the Indian Govt(which had given 25% of national skilling program contracts) to Everonn, is worried.
- He had the competence, training and reputation to steer the company out of waters like how the 3 independent directors appointed later had done for Satyam. Unlike the earlier Satyam directors, this tax episode had not sullied the independent directors at all.