Companies

After SEBI warning, HPCL agrees to classify ONGC as its promoter

Our Bureau MUMBAI | Updated on August 09, 2019 Published on August 09, 2019

For six consecutive quarterly shareholding pattern filings to the stock exchange including the latest for the quarter ended June, HPCL has listed ONGC as a public shareholder.

State-run oil refiner Hindustan Petroleum Corporation Ltd (HPCL) has finally agreed to recognize Oil and Natural Gas Corporation Ltd (ONGC) as its promoter after the Securities and Exchange Board of India (SEBI) warned of “appropriate action” if the market regulator’s advice on the issue was not heeded by August 13.

HPCL’s decision, made in an announcement to the stock exchanges on Friday, puts to rest the controversy over ONGC’s status after it bought the government’s 51.11 per cent stake in the oil refiner for ₹ 36,915 crore in January 2018.

For six consecutive quarterly shareholding pattern filings to the stock exchange including the latest for the quarter ended June, HPCL has listed ONGC as a public shareholder. Under the promoter/promoter group category, even the President of India does not hold any shares in HPCL now.

In September 2018, SEBI first advised HPCL to re-file the shareholding pattern to the stock exchanges revising the status of ONGC as 'promoter'.

In June this year, the ministry of petroleum and natural gas too directed HPCL to indicate 'President of India' as the promoter of HPCL and ONGC also to be added as a promoter below 'President of India'.

Read also: For HPCL, ONGC is still a ‘public shareholder’

HPCL did not abide by the aforesaid direction to revise the status of ONGC as its 'promoter' till now, forcing SEBI to step-in to crack the whip on HPCL.

In an August 6 letter, SEBI once again advised (HPCL) to re-file the shareholding pattern to the stock exchanges for all quarters since acquisition of shares by ONGC, while revising the status of ONGC as a 'promoter’, by August 13, 2019, failing which appropriate action will be initiated as per SEBI Act, the market regulator said.

SEBI also advised HPCL to place its letter before the next board meeting of the refiner, adding that its “informal guidance request is clear and self-explanatory and hence any further request for clarification on the issue does not arise”.

In absence of the specific clarification from SEBI regarding procedure and approvals in the subject matter, (and) in order to give effect to the above direction of SEBI by the stipulated date, we have no choice but to infer that no further approvals whatsoever is required to be obtained by HPCL from any stakeholder/agency in this regard, HPCL told SEBI.

“Accordingly, HPCL intends to rectify the shareholding pattern and classification of promoters by the stipulated date as per the direction from SEBI assuming that the above position is not in violation of any SEBI regulations,” HPCL’s company secretary V Murali wrote in an August 7 letter to SEBI.

In case any different position emerges in future, the same will be dealt based on the available facts with no liability whatsoever on HPCL as a result of the implementation of above directive from SEBI, HPCL’s Murali wrote in the letter which was also communicated to the stock exchange.

SEBI's letter dated August 6, 2019 was placed before the Board of Directors of HPCL in the meeting held on August 7, 2019 and this letter is being issued in line with the deliberations held, Murali added.

Published on August 09, 2019
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