BSE fines ONGC and others
Six state-owned companies are protesting against penalties imposed by the BSE and NSE stock exchanges for not appointing independent directors to their boards.
Both the NSE and BSE have separately levied a fine of Rs542,800 ($6515) each on ONGC, IndianOil, GAIL, Hindustan Petroleum, Bharat Petroleum and Engineers India for not having the stipulated number of independent directors in the quarter from July 1 to September 30 (2023). Under the Companies Act, 2013, "every listed public company must have at least one-third of a total number of directors as independent directors."
All these companies argue they are state-owned and the power to appoint independent and women directors lies with the oil ministry, not with them. "Appointments are outside the control of GAIL's management," writes GAIL company secretary Mahesh Kumar Agarwal in a November 22 (2023) letter to the NSE and the BSE.
ONGC company secretary and compliance officer Rajni Kant wrote on the same day: "ONGC is a government company, and the power to appoint directors (including independent directors) is vested with the government under its Articles of Association; the requirement to appointment additional independent directors was submitted to the government on May 8 (2023) and October 25 (2023); copies of these letters were submitted to the stock exchanges." Kant stresses that ONGC management is not to blame.
IndianOil company secretary Kamal Kumar Gwalani is even more forthright. "IndianOil should not be held liable to pay the fines, and the same should be waived," writes Gwalani in a letter sent the same day as the others.
An angry IndianOil source tells this report the BSE and NSE should punish the oil ministry, not IndianOil. "Whatever delays are taking place are because of the oil ministry's slow work speed," he says.
"A regulatory body like the PNGRB was headless for more than two years; you will never hear of such a thing anywhere else in the world!"