NSE and BSE fined IOC, HPCL, BPCL, GAIL, OIL and MRPL Rs 536,900 each for the January-March quarter. | File Photo
India’s largest oil companies, including Indian Oil, BPCL and gas firm GAIL, have been fined for a record fifth consecutive quarter for failing to comply with listing rules of having the required number of independent and female directors on their boards.
Stock exchanges BSE and NSE have imposed fines on oil refining and fuel marketing giants Indian Oil Corporation (IOC), Hindustan Petroleum Corporation Ltd (HPCL) and Bharat Petroleum Corporation Ltd (BPCL), exploration firm Oil India Ltd (OIL), gas services firm GAIL (India) Ltd and refiner Mangalore Refinery and Petrochemicals Ltd (MRPL) for not complying with the listing requirement in the April-June quarter.
In separate filings with the stock exchanges, the companies detailed the fines imposed by the BSE and NSE for not having the required number of independent directors or the mandatory number of women directors in the quarter ended June 30, 2024 (first quarter of the current fiscal year 2024-25), but 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 faced fines for the same reason in the previous four quarters.
Listing rules require companies to have independent directors in the same proportion as executive or functional directors. They are also required to have at least one female director on the board of directors.
The IOC said BSE and National Stock Exchange of India Ltd (NSE) imposed a penalty of Rs 5,36,900 each on the company for non-compliance with SEBI Regulation 17(1) (LODR) relating to composition of the Board of Directors during the quarter ended June 30, 2024.
“In response to the notices, IndianOil, vide letter dated August 22, 2024, has represented to the BSE and NSE that being a government company, the power to appoint directors (including independent directors) is vested in the Ministry of Petroleum and Natural Gas, Government of India and therefore, the shortfall of independent directors including non-appointment of independent women directors on the board of the company during the quarter ended June 30, 2024 was not due to any negligence/default on the part of the company,” IOC said.
Stating that the IOC should not be held liable for paying the fines and that they should be waived, the firm said it regularly engages with the ministry to appoint the necessary number of directors to ensure compliance with corporate governance rules.
“We would also like to inform that the company had received similar notices from the BSE and NSE in the past imposing fines and requests for exemption which were considered favourably by the exchanges,” it added.
BPCL said it has been fined Rs 2,41,900 each by BSE and NSE for having one missing independent director.
The firm said it has no control over the appointment of directors and will approach BSE Ltd and NSE for waiver of fines.
HPCL said it was fined Rs 5,36,900 each by BSE and NSE. GAIL also faced similar fines.
“It is sought to be stated that the non-compliance with regard to the composition of the board was not due to any negligence/default of the company nor was it within the control of the management of GAIL and that continuous efforts were also made to comply with the compliance requirements,” it added.
OIL and MRPL were also fined Rs 5,36,900 each by BSE and NSE.
The oil giants have failed to comply with listing rules since April last year and have been fined every quarter since then.
IOC, HPCL, BPCL, GAIL, OIL and MRPL were fined Rs 5,36,900 each by NSE and BSE for the January-March quarter.
The companies were fined Rs 542,800 each for the third quarter (October-December 2023). They had faced a similar fine for the second quarter (July-September 2023).
First published: August 25, 2024 | 1:01 PM IS
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