IOC and GAIL were punished for the second quarter in a row for not adhering to listing standards

 IOC and GAIL were punished for the second quarter in a row for not adhering to listing standards

The refiner Bharat Petroleum Corporation Ltd (BPCL) as well as Hindustan Petroleum Corporation Ltd (HPCL), gas utility GAIL, explorers Oil and Natural Gas Corporation (ONGC) as well as Oil India Ltd, and oil refining and gasoline marketing major Indian Oil Corporation (IOC) were all listed on the public markets. Engineers India Ltd. was penalized Rs. 5.42 lakh, according to stock market documents.

IOC and GAIL were punished for the second quarter in a row for not adhering to listing standards.

For the second consecutive quarter, state-owned energy conglomerates, such as Indian Oil and GAIL (India) Ltd, have faced fines for their inability to comply with listing criteria, namely regarding the requisite number of independent members on their boards. The refiner Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL), gas utility GAIL, explorers ONGC, which stands for Oil and Natural Gas Corporation, as well as Oil India Ltd, and oil refining and gasoline marketing major Indian Oil Corporation (IOC) were all listed on the public markets. Engineers India Ltd. was penalized Rs. 5.42 lakh, according to stock market documents.

The firms disclosed the specifics of the penalties levied by the NSE and BSE in separate filings, but they also made clear that the directors were not involved in the process since they were selected by the government. The second quarter's low number of independent directors was the cause of the punishment. For the same reason, he was also subject to a fine during the first quarter.

Although the firms have now been hit with a flat charge of Rs 5,42,800, ONGC, IOC, and GAIL were previously fined Rs 3.36 lakh, Rs 5.36 lakh, and Rs 2.71 lakh. Oil India was had to pay a charge of Rs 5.37 lakh, while HPCL and BPCL were compelled to pay fines of Rs 3.6 lakh apiece. Companies must have an equal number of independent directors as executive or functional directors in order to comply with listing standards. Additionally, they must have a minimum of one female director on the board.

The Ministry of oil and gas (MoPNG), Government of India, has the authority to select directors, including independent directors, since the firm is a government enterprise, the IOC said in its filing, which it has sent to the BSE and NSE. Therefore, the company's failure to nominate the woman independent director to the Board for the quarter that concluded on September 30, 2023, was not the result of carelessness or error. It should be done, according to the IOC, which said that it "should not be held liable to shell out the penalty and it should not be waived off."

The firm said that it had previously received shares in the MoP&NG and that it has been in frequent negotiations with MOP&NG for the nomination of the necessary number of independent directors (including women independent directors) to guarantee compliance with corporate governance rules. The exchanges sent notices of the enforcement of fines and comparable penalties. The exchanges gave its request for an exemption positive consideration. According to GAIL, "continuous efforts were also made to meet the compliance requirements, hence the non-compliance with respect to the structure of the the board was neither a consequence of any negligence/omission by the business itself nor within the control of GAIL's management."

"MOP&NG, the Indian government's administrative branch, is in charge of GAIL (India) Limited, a "Government Company." The Government of India appoints and nominates each of the directors on the GAIL Board, including the Independent Directors.Therefore, GAIL management has no influence or authority over the appointments. The Company routinely petitions the Indian government to appoint the necessary number of independent members to its board of directors."

ONGC said that it had brought up the need for the appointment of more independent directors to the firm board with the government in both May and October. "The Government of India has been requested to nominate the appropriate amount of independent individuals on the Board of the Company," it said.

BPCL said that up until April 30th, it fulfilled with the listing requirement of having 50% independent directors on the board; but, beyond that date, it would lack one independent director. It said, "BPCL has periodically requested the nomination of an Independent Director through the Government of India."

"BPCL has no influence on the appointment of directors since it happens after the Government of India receives nominations. In order to get the fine waived, BPCL will speak with BSE Limited and National Stock Exchange of India Limited. The stock markets have received a similar request from HPCL. "The Company has been addressing the Government from time to time for assignment of the required number of directors on its Board as well as the Government of India is aware of the matter."

OIL said that the Administrative Ministry (MoPNG) appoints directors to the Board since it is a Government of India firm, and the company has no influence over the alleged non-compliance with regard to the makeup of the Board. to avoid paying the fine. ''The corporation has been consistently asking the appointment of independent directors to the board from the Ministry of Petroleum and Natural Gas,'' the statement said.

EIL said that it has "represented to the exchanges to consider waiver of consequence as Engineers India Limited is a government company therefore the power to appoint directors, including independent directors, on its board rests alongside MoPNG, Government of India." However, it is being implemented. MoPNG periodically assigns the necessary number of directors to its Board, and MoPNG's reaction is anticipated.