Stock Exchanges imposed fine on IOC, GAIL and ONGC for the third consecutive quarter, know the reason

The Stock Exchange has imposed fines on many government companies related to the oil and gas sector for the third consecutive quarter for not following the necessary rules. Government-owned companies like Indian Oil, ONGC and GAIL failed to appoint the required number of directors on their boards.

In separate filings, these companies informed about the penalty imposed by BSE and NSE for not having the required number of independent directors or mandatory women directors in the third quarter ended December 31, 2023. However, he also said that these appointments come under the jurisdiction of the government and he has no role in them. In the last two quarters also, fines were imposed on these companies for the same reason.

Six PSUs said in separate filings that the stock exchange has imposed a penalty of Rs 5,42,800 on them for the third quarter. ONGC and its subsidiaries HPCL and MRPL along with GAIL and OIL did not have the required number of independent directors on their boards. At the same time, the IOC board had to face fines because there was not a single woman independent director.

As per the listing norms, companies also have to have independent directors in equal proportion to executive directors. Also, there should be at least one woman director on the board. In the second quarter, IOC, ONGC, OIL, GAIL, Bharat Petroleum Corporation Limited, HPCL and Engineers India Limited had to face fines for this reason.

"Being a government company, the power to appoint directors (including independent directors) rests with the Ministry of Petroleum and Natural Gas, Government of India," IOC said in a regulatory filing. There is no negligence or fault of the company due to the non-appointment of a woman independent director on the board during the quarter ending December 31, 2023. The IOC said his fine should therefore be waived.