iifl-logo-icon 1

Invest wise with Expert advice

By continuing, I accept the T&C and agree to receive communication on Whatsapp

  • Open Demat with exclusive Advice & Services
  • Get a dedicated Relationship Manager to help you grow your wealth
  • Exclusive advisory on 20+ trading & wealth-based investment options
  • One tap Investments, Automated trading & much more
  • Minimum 1 lakh margin required
sidebar image

Oil giants fined again for lacking directors

26 Mar 2024 , 03:17 PM

Large state-owned oil and gas companies, such as Indian Oil, ONGC, and GAIL (India), have been fined for the third quarter in a row for not having the required number of directors on its board in accordance with listing norms. Stock exchange filings revealed that a total of ₹32.5 Lakh was fined to refiners Hindustan Petroleum Corporation Ltd (HPCL) and Mangalore Refinery and Petrochemicals Ltd (MRPL), explorers Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL), gas utility GAIL, and the massive oil refining and fuel marketing company Indian Oil Corporation (IOC).

The companies were quick to point out that the government appointed the directors and they had no involvement in it, but they did detail the fines levied by the BSE and NSE in separate filings for either failing to have the required number of independent directors or the required number of women directors in the third quarter ended December 31, 2023. For the same reason, the corporations were fined in the preceding two quarters.

In their individual filings, the six PSUs revealed that they had been fined ₹5,42,800 apiece for the third quarter. IOC was fined for lacking a woman independent director on its board, while ONGC and its subsidiaries HPCL and MRPL, GAIL and OIL were fined for not having the required number of independent directors on their boards. 

Companies must have independent directors in the same percentage as executive or functional directors in order to comply with listing standards. Additionally, they must have a minimum of one female director on the board. IOC, ONGC, OIL, GAIL, Bharat Petroleum Corporation Ltd, HPCL, and Engineers India Ltd were all hit with fines totaling ₹5.42 Lakh for the second quarter.

'Being a government company, the power to appoint directors (including independent directors) vests with the Ministry of Petroleum and Natural Gas, Government of India,' the Indian Oil Corporation (IOC) stated in its regulatory filing in response to the most recent fine. 'Therefore, the non-appointment of women independent directors on the Board during the quarter ended December 31, 2023 was not due to any negligence/fault by the company.' IOC argued that as a result, the fines should be waived and it shouldn't be required to pay them. 

It added that it had previously received similar notices from the two stock exchanges and that its request for a waiver had been approved. 'IOC regularly takes up with ministry for appointment of requisite number of independent directors (including woman independent director) to ensure compliance with corporate governance norms enunciated under SEBI (LODR) as well as the Companies Act,' the statement read.

'Appointments are outside the purview/control of the GAIL's management,' GAIL stated in the submission. 'The Company has been persistently pursuing the appointment of necessary numbers of independent directors with the Government of India (GoI) to meet the compliance requirements, and the non-compliance with regard to the composition of the Board was not within the control of the Company,' ONGC stated.

According to MRPL, the ministry 'has been actively considering' the request for the nomination of the necessary number of independent directors to the board, which it has been following up with on a regular basis. 

OIL claimed that it has asked the ministry to add independent directors to the company's board of directors in order to comply with Regulation 17(1) of the SEBI (LODR) Regulations, 2015, citing that the non-compliance was outside the company's control. When the corporations were fined for non-compliance in the preceding two quarters, they gave identical explanations and took corrective action.

Additionally, a uniform ₹5,42,800 punishment was imposed on IOC, ONGC, OIL, GAIL, BPCL, HPCL, and Engineers India Ltd for the second quarter. The April-June quarter non-compliance resulted in fines of ₹3.36 Lakh for ONGC, ₹5.36 Lakh for IOC, and ₹2.71 Lakh for GAIL. While Oil India was hit with a charge of ₹5.37 Lakh, HPCL and BPCL were required to pay fines of ₹3.6 Lakh each.

For feedback and suggestions, write to us at editorial@iifl.com

ONGC - India

Related Tags

  • GAIL
  • India
  • IOC
  • oil
  • ONGC
sidebar mobile


Read More
Knowledge Centerplus

Logo IIFL Customer Care Number
1860-267-3000 / 7039-050-000

Logo IIFL Securities Support WhatsApp Number
+91 9892691696

Download The App Now

Knowledge Centerplus

Follow us on


2024, IIFL Securities Ltd. All Rights Reserved

  • Prevent Unauthorized Transactions in your demat / trading account Update your Mobile Number/ email Id with your stock broker / Depository Participant. Receive information of your transactions directly from Exchanges on your mobile / email at the end of day and alerts on your registered mobile for all debits and other important transactions in your demat account directly from NSDL/ CDSL on the same day." - Issued in the interest of investors.
  • KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary.
  • No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."

www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.

  • 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
  • On an average, loss makers registered net trading loss close to Rs. 50,000.
  • Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
  • Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.
Copyright © IIFL Securities Ltd. All rights Reserved.

Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248

We are ISO 27001:2013 Certified.

This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.