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PSUs warn stock markets that the government has the authority to nominate directors or face penalties

<p>Public sector undertakings (PSUs) that have received fines from stock exchanges have informed them that the government has the authority to choose directors, which is beyond of their control.<img decoding=”async” class=”alignnone wp-image-150550″ src=”https://www.theindiaprint.com/wp-content/uploads/2023/08/theindiaprint.com-download-2023-08-28t180944.256-11zon.jpg” alt=”theindiaprint.com download 2023 08 28t180944.256 11zon” width=”1232″ height=”923″ srcset=”https://www.theindiaprint.com/wp-content/uploads/2023/08/theindiaprint.com-download-2023-08-28t180944.256-11zon.jpg 259w, https://www.theindiaprint.com/wp-content/uploads/2023/08/theindiaprint.com-download-2023-08-28t180944.256-11zon-150×112.jpg 150w” sizes=”(max-width: 1232px) 100vw, 1232px” title=”PSUs warn stock markets that the government has the authority to nominate directors or face penalties 9″></p>
<p>“It is stated that ONGC, being a government company, power of appointment of Director (including Independent Director) is vested with the Government of India (GoI) as per the Articles of Association of the Company,” ONGC wrote in a response to stock markets.</p>
<p>Up to April 5, 2023, the business complied with board composition requirements. The requirement for the appointment of an additional Independent Director was submitted to the Government of India (GoI) via letter dated 08.05.2023, and a copy of said letter was also submitted to Stock Exchanges, according to ONGC, following the appointment of Director (HR) effective May 5, 2023 by the Appointments Committee of Cabinet, GoI.</p>
<p>It should be highlighted that the aforementioned non-compliance with the makeup of the Board was neither the result of business carelessness or default nor was it under the management of the firm’s control, and ongoing efforts are being made to satisfy the compliance standards. GoI has been asked to nominate the necessary number of independent directors to sit on the company’s board, according to ONGC.</p>
<p>According to ONGC, letters asking stock exchanges to waive the penalties have been issued since the business has no control over the nomination of directors.</p>
<p>Indian Oil reported receiving notices from BSE Ltd. (BSE) and National Stock Exchange of India Limited (NSE) regarding the company’s non-compliance with Regulation 17(1) of the SEBI LODR for failing to have a woman independent director on the board of the company during the quarter ended June 30, 2023, and the imposition of fines of Rs. 5,36,900 by BSE and NSE, respectively, for such non-compliance.</p>
<p>Indian Oil has responded to the notices by stating to the BSE and NSE that since the company is a government entity and the authority to appoint directors, including independent directors, rests with the MoP&NG, GoI, the absence of a woman independent director from the Board during the quarter ended June 30, 2023 was not the result of any carelessness or error on the part of the business.</p>
<p>In light of this, the penalties should be remitted and Indian Oil should not be held responsible for paying them. In order to guarantee compliance with the corporate governance standards established under SEBI (LODR) and the Companies Act, Indian Oil often requests from MoP&NG the appointment of the necessary number of independent directors (including female independent directors). We also want to let you know that the Company previously received identical warnings from the BSE and NSE imposing penalties, and the Exchanges had viewed the Company’s request for a waiver favorably, the statement stated.</p>
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