NSE, BSE impose ₹673,780 fine on MTNL for non-compliance of Sebi norms

The non-compliances of Mahanagar Telephone Nigam relate to its Board composition, including the absence of a woman director, and the improper constitution of key committees

State-run telecom company Mahanagar Telephone Nigam Ltd (MTNL) has been fined ₹673,780 by stock exchanges NSE and BSE for not complying with Securities and Exchange Board of India (Sebi) norms, the company said in a regulatory filing on Saturday.

 

The non-compliances relate to the Board’s composition, including the absence of a woman director, and extend to the improper constitution of the Audit, Nomination and Remuneration, Stakeholders’ Relationship, and Risk Management Committees.

 

Because of the above lapses, NSE and BSE have imposed fines amounting to ₹673,780, which includes a basic fine of ₹5,71,000, along with ₹1,02,780 as Goods and Services Tax.

 

MTNL seeks waiver

In its letter, MTNL clarified that it is a Public Sector Undertaking, and all Board appointments, including independent directors, are made by the Department of Telecommunications (DoT), Ministry of Communications. 

 

The company said that two independent directors, including one woman independent director, were appointed by DoT with effect from April 15.

 

“The matter for the appointment of four more independent directors has already been taken up with the government,” MTNL said. The company has also requested NSE and BSE to waive the fines.

 

Loan defaults rose to ₹8,659 cr

Last month, the company reported an increase in its loan defaults, with outstanding dues to public sector banks climbing to ₹8,659 crore as of July 31. The figure marks an increase from ₹8,584.93 crore of defaults reported on June 30.

 

In a stock filing on August 18, MTNL also reported that its total financial debt stood at ₹34,577 crore at the end of July. This is slightly higher than the ₹34,484 crore reported at the end of June.