Hindustan Petroleum Corporation Ltd. has recognised Oil and Natural Gas Corporation Ltd. as a promoter, according to its revised shareholding pattern.
Capital markets regulator Securities and Exchange Board of India had asked HPCL to refile its shareholding pattern to stock exchanges by Aug. 13, 2019, for all quarters since ONGC acquired the government's entire stake in the refiner in January 2018.
HPCL has refiled with the stock exchanges shareholding pattern of last six quarters beginning March 2018, the company said in a regulatory filing.
ONGC is listed as HPCL’s promoter with 77.88 crore shares, or 51.11 percent stake, just below President of India with 'zero' shares, under "statement showing the shareholding pattern of the promoter and promoter group" in the revised document.
ONGC had in January 2018 bought the government's entire 51.11 percent stake in HPCL for Rs 36,915 crore but continued to be mentioned as "public shareholder" in the filings by the oil marketing company.
The President of India, in six shareholding pattern filings of HPCL made since then, remained as "promoter" without any stake in the company.
In an Aug. 6 letter, SEBI asked HPCL to refile "the shareholding pattern to the stock exchanges revising the status of ONGC as 'promoter'."
"Further, as informed by HPCL vide its email dated June 27, 2019, Government of India has also advised HPCL that 'President of India' will continue to be the promoter of HPCL, and ONGC to be added as a Promoter below President of India,” the letter said.
“However, HPCL has not abided by the aforesaid direction to revise the status of ONGC as 'promoter' till now," the markets regulator said. SEBI said its response to the informal guidance request was "clear and self-explanatory".
In July, an HPCL spokesperson had said that the firm needed "clarifications/details" from "multiple agencies/authorities to ensure compliance to various stipulations applicable to listed companies including Companies Act, SEBI Regulations, etc." to recognise ONGC as a promoter.
"As soon as all clarifications/details are received from concerned agencies/authorities, necessary amendments as required will be made in the regulatory filings after following due process. Till such time, the status quo is being maintained in the regulatory filings," the spokesperson had said.
According to SEBI's rules, the entity that owns a controlling stake in a company should be listed as a promoter even if it was not the original promoter of the company.
When Indian Oil Corporation Ltd. had bought the government's stake in fuel retailer IBP Co. Ltd., it was listed as the latter's promoter in every instance after the deal. The same was the case when Indian Oil acquired a majority stake in Chennai Petroleum Corp. Ltd.
More recently, Mindtree Ltd. recognised Larsen & Toubro Ltd. as promoter immediately after the months-long hostile takeover was completed.
Since acquiring a majority stake in HPCL, ONGC has only been able to appoint one director to the firm's board. HPCL head Mukesh K Surana continues to be the chairman and managing director despite corporate governance structure mandates only one chairman in a group and subsidiaries being headed by managing directors or chief executive officers.
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