Indian Oil Corporation Ltd. (IOC) and Bharat Petroleum Corporation Limited (BPCL) have been fined by the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) for the fifth successive quarter over non-compliance with the number of independent directors on the board of the domestic oil majors, reported the Times of India on Sunday, August 25.
The two oil companies are amongst the largest oil refiners and fuel marketers in India. Companies like Indian Oil, Bharat Petroleum, Oil India, Gas Authority of India, and Mangalore Refinery and Petrochemicals were the ones on which the stock exchanges imposed fines for failing to meet the listing requirements in the quarter that ended June 2024, said the report.
The listing rules mandate that the companies have the same proportion of independent directors as executives or functional directors and at least one female director on the board. The companies responded that the appointment of independent directors is the government’s responsibility, and the corporation has no control over it, according to the report.
Indian Oil has been fined ₹5,36,900 from the NSE and the BSE for non-compliance with Regulation 17(1) of the SEBI (LODR), which states the composition of the Board of Directors as of the quarter ended June 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) vests with the Ministry of Petroleum and Natural Gas, Government of India and hence the shortfall in independent directors including non-appointment of women independent director on the board of the company during the quarter ended June 30, 2024 was not due to any negligence/default by the company,” said Indian Oil in a statement, according to the news report.
The oil major stated that it should not be held responsible for paying the fines and requested them to be waived. The company is in talks with the ministry to ensure the appointment of the required number of directors to maintain compliance with the corporate governance standards, said the report.
Bharat Petroleum also received fines of ₹2,41,900 each from the BSE and NSE for having one less independent director on its board of directors. The oil refiner and marketer also took a similar stance of having no control over the appointment of the directors and has approached the exchanges for a fine waiver, according to the report.
Hindustan Petroleum has been fined ₹5,36,900, and GAIL has also been fined for similar reasons by the NSE and the BSE. “This is to submit that the non-compliance with regard to the composition of the board was neither due to any negligence/default by the company nor within the control of GAIL’s management, and continuous efforts were also made to meet the compliance requirements,” said GAIL, quoted in the report.
Oil India and Mangalore Refinery and Petrochemicals have been fined ₹5,36,900 each by both the stock exchanges.
The Indian oil companies have been fined ₹5,36,900 each by NSE and BSE for the January-March quarter of 2024. They were fined ₹5,42,800 each for the third quarter of 2023-24, and a similar fine in the second quarter of the financial year 2023-24, according to the report.