Maharatna Oil PSU, Indian Oil Corporation Limited (Indian Oil), has been penalized by both BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE) for non-compliance with SEBI regulations concerning the composition of its Board of Directors. The exchanges have each imposed a fine of Rs 5,36,900 for the company’s failure to meet these requirements during the quarter ending June 30, 2024. The issue involves a shortfall in the number of Independent Directors on Indian Oil’s board, including the absence of a Woman Independent Director, as mandated by Regulation 17(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR).
In a regulatory filing on Thursday, Indian Oil revealed that it has challenged the fines through a letter dated August 22, 2024, addressed to both BSE and NSE. The company argued that, as a government entity, the authority to appoint Directors, including Independent Directors, resides with the Ministry of Petroleum and Natural Gas (MoP&NG), Government of India. Indian Oil asserted that the delay in these appointments was not due to any fault or negligence on its part.
Indian Oil also emphasized its ongoing efforts to collaborate with MoP&NG to expedite the appointment of the necessary Independent Directors in order to comply with SEBI’s corporate governance norms and the Companies Act. The company highlighted that in previous instances where fines were imposed, the exchanges had favorably considered their request for a waiver. The outcome of Indian Oil’s current waiver request is still awaited as the company continues to advocate for leniency, citing its status as a government-controlled entity and its efforts to meet regulatory standards.
