More than a dozen Indian companies, mostly state-run firms like IRCON, all three oil refiners and even private companies like Adani Green Energy have been fined by both the Bombay Stock Exchange and the National Stock Exchange for non-compliance of SEBI (Securities & Exchange Board of India) rules pertaining to the composition of their respective board.
NSE
The fines charged by each of the exchanges range from as low as ₹34,000 to over ₹5.5 lakh.
Exchange filings suggest that penalties are pertaining to failure to appoint the required number of independent directors, including women directors. However, in the case of state-run enterprises, the appointment of independent directors are vested with the Government of India.
Directors in PSUs are appointed after being nominated by the government. As a result, the companies do not have any control over the appointment of directors. Therefore, BPCL, which has been fined a sum of ₹5,42,800 each by both BSE and NSE for non-compliance of regulatory norms for 92 days, will approach the exchanges for a waiver.
"As the Directors are appointed after receipt of nomination from Government of India, BPCL has no control over the appointment of Directors. Hence, BPCL will be approaching BSE and NSE for waiver of the above mentioned fines levied on BPCL," the state-run refiner said in an exchange filing.
| Company | Fine |
| Adani Green Energy | 5,61,680 |
| Hindustan Zinc | 5,42,800 |
| IRCON | 5,42,800 |
| HPCL | 5,42,800 |
| Indian Oil | 5,42,800 |
| Garden Reach Shipbuilders | 5,42,800 |
| BPCL | 5,42,800 |
| GAIL | 5,42,800 |
| IRFC | 5,42,800 |
| ONGC | 5,42,800 |
| Max Healthcare | 2,36,000 |
| Adani Enterprises | 34,000 |
Some other firms penalised include Hindustan Composites, which was penalised 1,62,000, for delaying the appointment of non-executive director who had attained the age of 75 years.
However, in an exchange filing, Adani Green Energy said that it has already appointed two more independent directors effective from September 7, 2023 and changed the composition of committees thereafter and after which, the company is in full compliance of the SEBI regulations.
As per SEBI regulation, every listed company must have at least one-third of directors as independent directors with a minimum of one-women director. The SEBI rule further says that no person who has attained age of 75 years shall be appointed non-executive director of a listed company unless a special resolution has been passed to that effect.
(Edited by : Hormaz Fatakia)
First Published:Nov 23, 2023 8:50 AM IST
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