IOC, HPCL, BPCL, GAIL, OIL and MRPL were each fined Rs 5,36,900 by NSE and BSE for the January-March quarter. | File photo
India’s largest oil companies, including Indian Oil, BPCL and gas utility GAIL, have been fined for the fifth consecutive quarter, a record, for failing to meet listing norms for the number of independent and women directors required on their boards.
Stock exchanges BSE and NSE have imposed penalties on oil refining and fuel marketing giants Indian Oil Corporation (IOC), Hindustan Petroleum Corporation Ltd (HPCL) and Bharat Petroleum Corporation Ltd (BPCL), explorer Oil India Ltd (OIL), gas utility GAIL (India) Ltd and refiner Mangalore Refinery and Petrochemicals Ltd (MRPL) for failing to meet listing requirements in the April-June quarter.
In separate bourse filings, the companies detailed the penalties imposed by the BSE and NSE for not having the required number of independent directors or the required number of women directors in the quarter ended June 30, 2024 (first quarter of the current fiscal year 2024-25). However, they were quick to point out that the appointment of directors was done by the government and they had no role in it.
The companies had also been fined for the same reason in the previous four quarters.
According to stock exchange standards, companies must have independent directors in the same proportion as executive or functional directors. They must also have at least one female director on the board.
IOC said BSE and the National Stock Exchange of India Ltd (NSE) have imposed a penalty of Rs 5,36,900 each on the company for non-compliance with Regulation 17(1) of SEBI (LODR) regarding composition of the board of directors during the quarter ended June 30, 2024.
“In response to the notices, IndianOil has stated in a letter dated 22nd August 2024 to the BSE and NSE that since it is a public sector undertaking, the power to appoint directors (including independent directors) vests with the Ministry of Petroleum and Natural Gas, Government of India. Therefore, the shortage of independent directors including non-appointment of women independent directors on the board of the company during the quarter ended 30th June 2024 was not due to any negligence/default on the part of the company,” the IOC said.
The company said the IOC should not be held liable for paying the fines and that they should be waived. It also said it was in regular contact with the ministry to appoint the required number of directors to ensure that corporate governance standards were met.
“We would also like to bring to your attention that the company has received similar communications from the BSE and NSE in the past indicating that the exchanges responded positively to the company’s fines and waiver requests,” the report said.
BPCL said it has been fined Rs 2,41,900 by BSE and NSE for failing to appoint an independent director.
The company stated that it had no say in the appointment of directors and said it would approach BSE Ltd and NSE to waive the penalties.
HPCL said it has been fined Rs 5,36,900 by BSE and NSE. GAIL too has been slapped with similar fines.
“It is argued that the non-compliance with regard to the composition of the board of directors was neither due to any negligence/omission of the company nor was it within the control of the management of GAIL and that continuous efforts have been made to meet the compliance requirements,” it added.
OIL and MRPL were also fined Rs 5,36,900 each by BSE and NSE.
The oil giants have not met stock market listing standards since April last year and have been fined every quarter since then.
IOC, HPCL, BPCL, GAIL, OIL and MRPL were each fined Rs 5,36,900 by NSE and BSE for the January-March quarter.
The companies were each fined Rs 5,42,800 for the third quarter (October-December 2023). They were given a similar penalty for the second quarter (July-September 2023).
First publication: Aug 25, 2024 | 1:01 PM IST