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HPCL digs in heels, says acting as per statute in not recognising ONGC as promoter

Press Trust of India  |  New Delhi 

Virtually rejecting ONGC's demand, Petroleum Corp Ltd (HPCL) has said it is acting as per its understanding of the statute in not recognising the new as its promoter.

"Whatever we are doing, whatever we have done and whatever we will be doing will be as per our understanding of the statute and the guidelines and Companies Act and the SEBI guidelines...

"Beyond that who is interpreting whatever, it is his understanding of the situation. We need not subscribe to that," HPCL and Managing Surana told reporters here.

He was asked about ONGC seeking recognition as the promoter of the company post-acquisition of majority stake in HPCL.

Oil and (ONGC) had in January this year bought the government's entire 51.11 per cent stake in HPCL for Rs 36,915 crore. Post that, HPCL had become a subsidiary of ONGC.

But HPCL in its regulatory filing to the stock exchanges, the latest being on July 12, still lists 'of India' as the promoter with 'zero' per cent shareholding. ONGC, on the other hand, is listed under 'Public Shareholder'.

ONGC has written to HPCL management asking it to take steps to rectify the filings to reflect the true promoter of the company.

Asked about ONGC's request, Surana said, "Everybody is free to express their views... Our actions will be guided by what we think is right."

Since ONGC takeover in January, HPCL has made two stock exchange filings about the shareholding pattern of the company -- the first on April 20 and then on July 12. In both, ONGC is shown as the public shareholder and of listed as the promoter.

Sources said ONGC feels the HPCL management is bound to take corrective action to reflect the true picture.

According to the Securities and Exchange Board of India's rules, the entity that owns the controlling stake should be listed as promoter even if it was not the original promoter of the company.

When (IOC) had bought government's stake in IBP Co Ltd, it was listed as the latter's promoter in every instance after the deal. The same was the case when IOC acquired a majority stake in (CPCL).

Surana has retained the title of and Managing despite corporate governance structure require a group having just one and subsidiaries being run by managing directors and CEOs.

ONGC's overseas subsidiary, ONGC Videsh Ltd, is headed by a Managing and CEO. Its and Petrochemicals Ltd (MRPL), which is listed on BSE, too is led by a ONGC Chairman is the of both the companies.

Since acquiring a majority stake in HPCL, ONGC has only been able to appoint one director to that firm's board.

ONGC has appointed its Director (Finance) to HPCL board. He has replaced Sushma Taishete Rath, in the and Natural Gas.

Prior to this, HPCL had two government nominee directors -- and Sandeep Poundrik, (Refineries) of the After the appointment of Kumar, there remains only one on HPCL board.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, August 09 2018. 13:00 IST