Coal India fined ₹10.72 lakh for non-compliance with Sebi directives

State-owned CIL on Monday said it has been fined ₹10.72 lakh for non-compliance with Sebi norms with regard to the appointment of requisite number of independent directors on its board.

Both BSE and NSE have imposed a fine of ₹5.36 lakh each on the coal major, it said.

"The company is in receipt of notice from National Stock Exchange (NSE) and BSE... regarding non-compliance with the provisions of Regulation 17 of the Sebi LODR for the quarter ended June 30, 2025 and has imposed a fine of Rs 5,36,900 each for such non-compliance," Coal India Ltd (CIL) said in a regulatory filing.

Non-compliance with Regulation 17 of the Sebi LODR Regulations, 2015, primarily concerns violations of corporate governance rules, such as improper board composition e.g. lack of independent directors or failure to pass a special resolution for a non-executive director aged 75 plus or inadequate board meeting practices (failing to meet for minimum four times a year).

Coal India accounts for over 80 per cent of domestic coal production.

The non-compliance, it said, was neither due to any negligence, default by the company nor within the control of CIL's management and added that continuous efforts were also made to meet the compliance requirements.

The appointment of all board members is done by the President of India, it said.

Accordingly, appointment of board members are outside the purview of CIL's management.

The coal behemoth is regularly following up the matter with the coal ministry for the appointment of a requisite number of independent directors on its board.

"CIL had requested BSE and NSE for waiver of penalty... in the past waiver requests were considered favourably by the exchanges," it added.

At present CIL has six independent directors on its board.

State-owned CIL reported a six per cent drop in production at 229.8 million tonnes (MT) in the April-July period of the current financial year even as the government is making efforts to increase the output to cut imports.

The company had produced 244.3 MT of coal in the corresponding period of the previous fiscal.

The coal behemoth did not give reasons for the decline in production. However, industry analysts attribute the production dip to typical monsoon-related disruptions, which can hinder mining operations and dispatch to power plants.