All listed firms must have at least one woman director on their boards from 1 April 2015, as per a directive by the Securities and Exchange Board of India
New Delhi: As many as 56 companies including Tata Power Co. Ltd, Alstom India Ltd, state-run Oil and Natural Gas Corp. Ltd (ONGC) and GAIL (India) Ltd have failed to comply with markets regulator the Securities and Exchange Board of India’s (Sebi) norms to appoint at least one woman director on board, primary market tracker Prime Database said.
These non-compliant firms include a host of public sector undertakings (PSUs) and public sector banks (PSBs).
All listed firms were required to have at least one woman director on their boards from 1 April 2015, as per a Sebi directive, as also under the Companies Act, 2013.
These rules are aimed at ensuring gender diversity in boardrooms. According to Prime Database, a total of 56 National Stock Exchange-listed (NSE) companies have not appointed a woman director on board.
BEML, Bharat Petroleum Corp. Ltd, Hindustan Organic Chemicals Ltd, HMT Ltd, Indian Oil Corp. Ltd, MMTC Ltd, National Fertilisers Ltd, Power Finance Corp. Ltd, Syndicate Bank Ltd, Rural Electrification Corp. Ltd, Oriental Bank of Commerce, State Trading Corp. of India Ltd and Madras Fertilisers Ltd are among the PSUs that are yet to comply with the Sebi’s directive.
Some of the private entities that are yet to induct women directors are Lanco Infratech Ltd, DB Corp. Ltd, Valecha Engineering Ltd, Servalakshmi Paper Ltd and Salora International Ltd.
The rule was first announced by Sebi in February 2014 with an initial deadline of 1 October the same year, which was later extended by six months. Since then, most of the companies listed on the NSE have hired a woman member on board.
A significant number of firms appointed a woman member from the promoter family to comply with the rule within the deadline.
Acting against listed firms without a mandatory woman director, Sebi in April 2015 announced a minimum ₹ 50,000 fine and warned of further action, including against the promoters and directors, if they remained non-compliant beyond six months.
The Sebi announced a four-stage penalty structure where fines would increase with the passage of time. It had asked the stock exchanges to levy the fines as the violation relates to the listing agreement.
The listed companies complying between 1 April and 30 June 2015 will have to pay ₹ 50,000. Those complying between 1 July and 30 September would need to pay ₹ 50,000 and an additional ₹ 1,000 per day till compliance.
The listed firms complying on or after 1 October 2015 will have to pay ₹ 1.42 lakh, plus ₹ 5,000 per day till the date of compliance.
For any non-compliance beyond 30 September 2015, the regulator may take any other action against the non-compliant entities, their promoters and/or directors or issue such directions in accordance with law, as considered appropriate.