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IOC, GAIL, ONGC fined 4th time for director lapses
OIL & GAS

IOC, GAIL, ONGC fined 4th time for director lapses

State-owned oil and gas giants, including Indian Oil, ONGC, and GAIL (India), have received fines for the fourth consecutive quarter due to their failure to meet listing requirements regarding the necessary number of directors on their boards.

According to stock exchange filings, stock exchanges imposed a total fine of Rs 3.4 million on oil refining and fuel marketing giants Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL), and Bharat Petroleum Corporation (BPCL), explorers Oil and Natural Gas Corporation (ONGC) and Oil India (OIL), gas utility GAIL, and refiner Mangalore Refinery and Petrochemicals (MRPL) for not fulfilling the listing requirement in the January-March quarter.

The companies, in separate filings, disclosed the fines imposed by the BSE and NSE for either lacking the required number of independent directors or the mandated women director in the quarter ended March 31, 2024, but emphasized that the appointment of directors was made by the government, and they had no involvement in it.

They had previously faced fines for the same reason in the preceding three quarters as well.

In separate filings, IOC, HPCL, BPCL, GAIL, OIL, and MRPL stated that they had been fined Rs 536,900 each for the fourth quarter, while ONGC faced a fine of Rs 182,900.

Listing norms mandate companies to have independent directors in the same proportion as executive or functional directors and to have at least one woman director on the board.

ONGC mentioned that it was fined due to its board lacking one independent director.

IOC stated that "the power to appoint directors (including independent directors) vests with the Ministry of Petroleum and Natural Gas, Government of India, and hence the shortfall in independent directors, including the non-appointment of a women independent director on the board of the company during the quarter ended March 31, 2024, was not due to any negligence/default by the company."

"Accordingly, IndianOil should not be held liable to pay the fines, and the same should be waived-off," IOC added.

The company highlighted that it regularly takes up the appointment of independent directors on the company board with the parent ministry and that it "had received similar notices from the BSE and NSE in the past imposing fines, and waiver requests from the company were considered favorably by the exchanges."

HPCL and BPCL made similar statements, while GAIL remarked that appointments are beyond the purview/control of company management. OIL mentioned that it has requested the ministry for the appointment of independent directors.

MRPL noted that it has been continuously following up with the ministry for the appointment of the requisite number of independent directors on the board, and the same has been under active consideration.

The companies were fined Rs 5,42,800 each for the third quarter (October-December 2023) and faced a similar fine for the second quarter (July-September 2023).

State-owned oil and gas giants, including Indian Oil, ONGC, and GAIL (India), have received fines for the fourth consecutive quarter due to their failure to meet listing requirements regarding the necessary number of directors on their boards. According to stock exchange filings, stock exchanges imposed a total fine of Rs 3.4 million on oil refining and fuel marketing giants Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL), and Bharat Petroleum Corporation (BPCL), explorers Oil and Natural Gas Corporation (ONGC) and Oil India (OIL), gas utility GAIL, and refiner Mangalore Refinery and Petrochemicals (MRPL) for not fulfilling the listing requirement in the January-March quarter. The companies, in separate filings, disclosed the fines imposed by the BSE and NSE for either lacking the required number of independent directors or the mandated women director in the quarter ended March 31, 2024, but emphasized that the appointment of directors was made by the government, and they had no involvement in it. They had previously faced fines for the same reason in the preceding three quarters as well. In separate filings, IOC, HPCL, BPCL, GAIL, OIL, and MRPL stated that they had been fined Rs 536,900 each for the fourth quarter, while ONGC faced a fine of Rs 182,900. Listing norms mandate companies to have independent directors in the same proportion as executive or functional directors and to have at least one woman director on the board. ONGC mentioned that it was fined due to its board lacking one independent director. IOC stated that the power to appoint directors (including independent directors) vests with the Ministry of Petroleum and Natural Gas, Government of India, and hence the shortfall in independent directors, including the non-appointment of a women independent director on the board of the company during the quarter ended March 31, 2024, was not due to any negligence/default by the company. Accordingly, IndianOil should not be held liable to pay the fines, and the same should be waived-off, IOC added. The company highlighted that it regularly takes up the appointment of independent directors on the company board with the parent ministry and that it had received similar notices from the BSE and NSE in the past imposing fines, and waiver requests from the company were considered favorably by the exchanges. HPCL and BPCL made similar statements, while GAIL remarked that appointments are beyond the purview/control of company management. OIL mentioned that it has requested the ministry for the appointment of independent directors. MRPL noted that it has been continuously following up with the ministry for the appointment of the requisite number of independent directors on the board, and the same has been under active consideration. The companies were fined Rs 5,42,800 each for the third quarter (October-December 2023) and faced a similar fine for the second quarter (July-September 2023).

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