IOC, GAIL, ONGC fined for fourth straight quarter for failure to appoint directors State-owned oil and gas companies such as IndianOil, ONGC, and GAIL (India) Ltd have received fines for the fourth consecutive quarter due to non-compliance with listing regulations regarding the number of directors on their boards. The fines totaled Rs 34 lakh, with stock exchanges penalizing companies like Indian Oil Corporation (IOC), Hindustan Petroleum Corporation Ltd (HPCL), Bharat Petroleum Corporation Ltd (BPCL), Oil and Natural Gas Corporation (ONGC), Oil India Ltd (OIL), GAIL, and Mangalore Refinery and Petrochemicals Ltd (MRPL) for the January-March quarter.
IOC, GAIL, ONGC fined for fourth straight quarter for failure to appoint directors Informations
The companies outlined the fines levied by the BSE and NSE for the absence of the necessary independent directors or the mandated female director in the quarter ending on March 31, 2024. They emphasized that the government was responsible for appointing directors, and they had no involvement in the process. Additionally, the companies had been fined for the same issue in the preceding three quarters. IOC, HPCL, BPCL, GAIL, OIL and MRPL in separate filings said they have been slapped with a fine of Rs 536,900 each for the fourth quarter. ONGC faced a fine of Rs 182,900.
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Companies must adhere to listing norms by maintaining a balance between independent directors and executive or functional directors, and by ensuring the presence of at least one female director on the board. ONGC received a penalty for not meeting the requirement of having a sufficient number of independent directors. IOC stated that the responsibility to appoint directors, including independent directors, lies with the Ministry of Petroleum and Natural Gas, Government of India. Therefore, the absence of independent directors, including a female independent director, in the company’s board during the quarter ending March 31, 2024, was not due to any fault on the company’s part. IOC argued that IndianOil should not be held accountable for the fines and requested for them to be waived off.
The company mentioned that it often appoints independent directors to its board with the parent ministry. It noted receiving similar notices from the BSE and NSE in the past, where fines were imposed, and waiver requests were favorably considered. HPCL and BPCL echoed similar sentiments, whereas GAIL stated that appointments fall outside the company management’s control. OIL mentioned requesting the ministry for the appointment of independent directors.
MRPL stated that it has been consistently following up with the ministry regarding the appointment of the necessary independent directors on the board, and this matter is actively being considered. The companies were fined Rs 5,42,800 each for the third quarter of 2023, following a similar fine in the second quarter. For non-compliance in April-June 2023, ONGC was fined Rs 3.36 lakh, IOC Rs 5.36 lakh, and GAIL Rs 2.71 lakh. HPCL and BPCL were each fined Rs 3.6 lakh, while Oil India faced a penalty of Rs 5.37 lakh.
