Air India board members requested to resign ahead of takeover by Tata Sons

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

"Seven board members have been asked to resign. These include four functional directors, two government nominee directors, chairman, and managing director (CMD). The board of directors have to resign... (before the transfer of control) takes place after the (last) board meeting of Air India," said an airline official, requesting anonymity. At a meeting on November 15, the board members were requested to quit, 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 the ruling party (Bharatiya Janata Party)'s Syed Zafar Islam, the non-official director of the airline," said the second official, who did not wish to be named.

In October, over 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 created in 1932.

Former Alliance Air CEO C S Subbaih said the resignations are a formality and an obligation, and that they provide a positive signal to the new owner that the process is on track and that they would take control as planned. "New board has to take over as Tata Sons are the new owner of the airline. The current board is such that there is a CMD and government directors and functional directors who all will have to quit."

According to Subbiah, the new board would likely include an independent director as well as specialists with international expertise. "The new owner might not have functional directors unlike the current board and might have more owners' representatives, independent directors, and an independent chairman and managing director. Tatas will bring in professionals to avoid mistakes of the past...it might even appoint an independent finance expert..."