Mangalore Refinery and Petrochemicals Limited (MRPL), a Government of India enterprise and a subsidiary of Oil and Natural Gas Corporation Limited (ONGC), has recently communicated with the National Stock Exchange of India Limited (NSE) and BSE Limited regarding non-compliance related to board composition as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for the quarter ended March 31, 2025.

The company disclosed that it received notices from NSE and BSE for non-compliance of various provisions of SEBI regulations, including Regulation 17(1), 17(2A), 18(1), 19, 20, and 21(2). These regulations primarily govern the constitution of the Board of Directors and its sub-committees to ensure proper corporate governance standards are maintained by listed entities.

As a consequence of the non-compliance, MRPL was levied a fine amounting to ₹13,71,160 (including GST) each by NSE and BSE. However, MRPL, being a Central Public Sector Enterprise (CPSE), explained that the nomination and appointment of directors on its board are controlled by the Administrative Ministry — the Ministry of Petroleum and Natural Gas (MoP&NG), Government of India.

MRPL emphasized that it has been consistently following up with the MoP&NG for the appointment of the requisite number of Independent Directors, including Women Independent Directors, to ensure compliance with SEBI norms. The company informed that the Ministry re-appointed four Independent Directors, including a woman Independent Director, on March 28, 2025. Subsequently, MRPL reconstituted its Board committees with effect from the same date. This action enabled the company to comply with the relevant SEBI regulations governing board composition and sub-committee constitution.

Given the status of MRPL as a CPSE and its continuous efforts to comply with the regulatory requirements by working closely with the government ministry, the company has requested NSE and BSE to consider waiving the fines imposed for the quarter ended March 31, 2025.

This development highlights the complex interaction between government administrative processes and corporate governance requirements for CPSEs like MRPL, which operate under unique frameworks compared to private sector companies. Maintaining compliance with SEBI’s listing obligations is critical for MRPL’s transparency and investor confidence, and the recent board restructuring signals the company’s commitment to upholding high governance standards.

In summary, MRPL’s latest disclosure underlines its efforts to resolve the non-compliance issues related to board composition and strengthen its governance framework in line with SEBI requirements. The company’s appeal for a fine waiver reflects its position as a government-controlled enterprise where director appointments depend on central government processes. This update will be closely watched by investors and market regulators as a case study of regulatory compliance challenges faced by CPSEs listed on stock exchanges.

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