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

New Delhi: Virtually rejecting ONGC's demand, Hindustan Petroleum Corp Ltd (HPCL) has said it is acting as per its understanding of the statute in not recognising the new majority shareholder 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 Chairman and Managing Director Mukesh Kumar 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 Natural Gas Corp (ONGC) had in January this year bought the government's entire 51.11 percent stake in HPCL for Rs 36,915 crore. Post that, HPCL had become a subsidiary of ONGC.[caption id="attachment_1225085" align="alignleft" width="380"]

Representational image. AFP.[/caption]But HPCL in its regulatory filing to the stock exchanges, the latest being on 12 July, still lists 'President of India' as the promoter with 'zero' percent 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 20 April and then on 12 July. In both, ONGC is shown as the public shareholder and President of India 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 Indian Oil Corporation (IOC) had bought 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 IOC acquired a majority stake in Chennai Petroleum Corp Ltd (CPCL).Surana has retained the title of Chairman and Managing Director despite corporate governance structure require a group having just one chairman and subsidiaries being run by managing directors and CEOs.ONGC's overseas subsidiary, ONGC Videsh Ltd, is headed by a Managing Director and CEO. Its refinery subsidiary Mangalore Refinery and Petrochemicals Ltd (MRPL), which is listed on BSE, too is led by a Managing Director and CEO. ONGC Chairman is the head of boards 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) Subhash Kumar to HPCL board. He has replaced Sushma Taishete Rath, Joint Secretary in the Ministry of Petroleum and Natural Gas.Prior to this, HPCL had two government nominee directors -- Rath and Sandeep Poundrik, Joint Secretary (Refineries) of the Oil Ministry. After the appointment of Kumar, there remains only one government nominee director on HPCL board.