In the face of fines, the PSUs ask the stock exchanges for the authority to appoint directors with the government

New Delhi, August 27: They have been told by public sector companies that stock exchanges have imposed on them that the appointment of directors is outside their control and that it is up to the government.

“It is stated that ONGC, as a government company, has the power to appoint a director (including an independent director) vested in the Government of India (GoI) as per the company’s Articles of Association,” ONGC said in a response to the shares. exchanges.

The company was in compliance with the composition of the Board of Directors until 04.05.2023. On appointment of a Director (Human Resources) with effect from 05.05.2023, by the Appointment Committee of the Cabinet, Government of India (GoI), the requirements for appointment of an additional Independent Director were submitted to a Visual Letter from the Government of India (GoI) dated 08.05.2023 and the ONGC said A copy of said letter has also been provided to the exchanges.

It should be noted that the aforementioned non-compliance with regard to the formation of the Board of Directors was not due to negligence/default on the part of the company and is not within the control of the company’s management, and continuous efforts are being made to meet the compliance requirements. The Iraqi government has been requested to nominate the required number of independent directors. on the company’s board of directors.

ONGC said since the appointment of board members became beyond the company’s control, letters of request were submitted to the exchanges to waive the fine imposed.

Indian Oil said the company had received notifications from BSE Ltd. (BSE) and the Indian National Stock Exchange Limited (NSE) on non-compliance with the provisions of Regulation 17(1) of SEBI LODR for not having an independent female director in the company. The Board of Directors of the Company during the quarter ended 30th June 2023, imposed a fine of Rs 5,36,900 each on BSE and NSE for such non-compliance.

In response to the notifications, Indian Oil clarified to the Bahrain Stock Exchange and the National Stock Exchange that the authority to appoint directors (including independent directors) as a government company, is vested in the Ministry of Oil and Gas and the Government of Iraq, and therefore not to appoint a woman independent director on the board. During the quarter ended June 30, 2023 it was not due to any negligence/fault on the part of the company.

“Accordingly, IOC should not be held liable for payment of fines and should be waived. IOC regularly engages with the Ministry of Oil and Gas to appoint the required number of independent directors (including an independent female) to ensure compliance with corporate governance. Rules laid down in SEBI (LODR) as well as corporate law. We would also like to know that the company has received similar notifications from the BSE and NSE in the past imposing fines and requesting a waiver from the company and it has been considered favorably by the exchanges,” he said.