New
Delhi: At the 12th annual general meeting of the Oil
and Natural Gas Corporation (ONGC) here today, chairman,
Subir Raha, referred to the `identity crisis' suffered
by public sector companies. "... The distinction
between a company and a department gets diffused in the
public sector domain," Raha said.
ONGC
currently has a gross income touching Rs47,245 crore for
the fiscal 2004-05.
Raha
in his statement said, "Companies are not departments.
Everyone expects companies to make profit, and everyone
considers departments to be cost-centres. The companies
by definition are governed by the Companies Act and departments
are administered under executive rules and procedures.
Companies have shareholders; departments do not. Listed
companies are legally liable for compliance with the Listing
Agreement; there is nothing like a listed department.
A listed company even in public sector remains a listed
company, not a department."
Stating
that administrative instructions could not override the
law, Raha pointed out that under the concept of limited
liability, each investor was obliged to share proportionate
risk, and equally share proportionate reward.
"The
purpose of a company is to create wealth. All business
involves risk, except when protected by the State. If
the State refuses to or withdraws protection, the choice
is either to dissolve the company and carry out the purpose
through a department, or let the company run as an enterprise,"
Raha said.
At
the AGM the shareholders approved the re-appointments
of N.K. Mitra (Director Exploration), N.K. Nayyar (Director
Navratna),
P.K. Sinha (Government nominee), Sunjoy Joshi (Government
nominee) and A.K. Hazarika (Director onshore) to the company's
board.
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