HPCL refuses to recognise ONGC as promoter

After Mukesh Kumar Surana, CMD of Hindustan Petroleum Corp Ltd (HPCL) rejected ONGC’s claim to be the promoter, oil minister Dharmendra Pradhan today tried to put an end to the row asserting that ONGC is the new promoter of (HPCL).

Rejecting ONGC’s claim to promoter status of HPCL after the state-run oil explorer bought the government’s entire 51.11-per cent stake in the refiner for Rs36,915 crore, Surana said HPCL is promoted by the government and not ONGC.
HPCL said, adding that it is acting as per its understanding of the statute, the guidelines and Companies Act and that of Sebi 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.
Petroleum minister Dharmendra Pradhan today clarified that ONGC is the new promoter of Hindustan Petroleum Corp Ltd (HPCL) as he tried to put an end to the row.
“Today, it is ONGC. ONGC is the promoter of HPCL,” Pradhan told reporters when asked who is the promoter of HPCL.
ONGC, he said, has invested in acquiring majority stake in the company and so it is the promoter, he said.
ONGC had, in January this year, bought the government’s entire 51.11-per cent stake in HPCL for Rs36,915 crore, thus making HPCL its subsidiary.
However, HPCL in its regulatory filing to the stock exchanges, still lists ‘President of India’ as the promoter with ‘zero’ per cent shareholding. ONGC is listed under ‘public shareholder’ category.
ONGC has written to HPCL management asking it to take steps to rectify the filings to reflect the true promoter of the company.
“Everybody is free to express their views… Our actions will be guided by what we think is right,” Surana said when asked about ONGC’s request.
HPCL has made two stock exchange filings since ONGC acquired the entire government stake in the refiner — the first on 20 April and then on 12 July – both showing ONGC as public shareholder and President of India as the promoter.
As per the Securities and Exchange Board of India (Sebi) rules, the entity that owns the controlling stake should be listed as promoter even if it was not the original promoter of the company.
Surana has retained the title of chairman and managing director of HPCL, although the new corporate governance structure requires that a group should have one chairman and subsidiaries are 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.
The ONGC chairman is the head of boards of both the companies.