labels: industry - general, oil & gas, economy - general, ongc, in the news
PSUs are not government departments: Subir Rahanews
22 September 2005

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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PSUs are not government departments: Subir Raha