SEBI imposes penalties on IOC, GAIL, ONGC for non-compliance
What's the story
Several state-owned oil and gas companies, including Indian Oil (IOC), Oil and Natural Gas Corporation (ONGC), and GAIL (India) Ltd, have been penalized for the fourth consecutive quarter. The reason behind the fines is their failure to meet listing requirements, specifically not having the necessary number of directors on their boards. According to stock exchange filings, a cumulative fine of ₹34 lakh has been imposed on these companies for non-compliance in the January-March quarter.
Fines imposed
Additional companies penalized for board shortcomings
Alongside IOC, ONGC, and GAIL, Hindustan Petroleum Corporation Ltd (HPCL), Bharat Petroleum Corporation Ltd (BPCL), Oil India Ltd (OIL), and Mangalore Refinery and Petrochemicals Ltd (MRPL) have also been fined. The fines were imposed by the BSE and NSE due to these companies' failure to meet the requisite number of independent directors or the mandated women director in the quarter ended March 31, 2024. This marks the fourth straight quarter that these companies have faced fines for this reason.
Response detailed
Companies respond to fines, cite government role
In response to the fines, the companies have pointed out that the appointment of directors is a responsibility of the government. Specifically, IOC stated that "the power to appoint directors (including independent directors) vests with the Ministry of Petroleum and Natural Gas, Government of India." They further argued that their failure to meet board requirements was not due to any negligence or default on their part. Consequently, IOC has requested for these fines to be waived off.
Similar statements
Other companies echo IOC's response to fines
HPCL and BPCL have made similar statements to IOC, emphasizing that the appointment of directors is beyond their control. GAIL also stated that such appointments are outside their jurisdiction. Meanwhile, OIL has requested the ministry for the appointment of independent directors. MRPL has been continuously following up with the ministry for the appointment of requisite number of independent directors on its board.