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Air India board members asked to resign ahead of Tata Sons takeover

Board members of Air India were asked to resign last week, and they are expected to do so at their last meeting next month before Tata Sons takes over the airline in January, according to people familiar with the situation.

“Seven members of the board of directors have been asked to resign.” Four functional directors, two government-nominated directors, the chairman, and the managing director are among them (CMD). “The board of directors must resign… (before the transfer of control) occurs after the (last) board meeting of Air India,” said an airline official who asked to remain anonymous. At a meeting on November 15, the board members were asked to resign, he said.

According to a second airline official, the final board meeting will take place in the second or third week of December, after which all seven directors will resign. “This will include Syed Zafar Islam, the airline’s non-official director and a member of the ruling party (Bharatiya Janata Party),” said the second official, who did not want to be identified.

In October, nearly 70 years after its nationalisation, the government chose Tata Sons as the winning bidder for the debt-ridden state-run Air India. Tata Airlines, the forerunner of Air India, was founded in 1932.

Former Alliance Air CEO C S Subbaih said the resignations are a formality and a requirement, and that they send a positive signal to the new owner that the process is on track and that they will take control as planned. “Because Tata Sons is the new owner of the airline, a new board will have to take over.” The current board is structured in such a way that the CMD, government directors, and functional directors will all have to resign.”

According to Subbiah, the new board will likely include an independent director as well as professionals with international experience. “Unlike the current board, the new owner may not have functional directors and instead have more owners’ representatives, independent directors, and an independent chairman and managing director.” To avoid past mistakes, Tatas will bring in professionals…it may even appoint an independent finance expert”. Air India spokesperson did not respond to HT’s query.

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