Hindustan Petroleum, in public filings of its shareholding pattern, identifies ONGC, with 51.11 percent stake, as a public shareholder, although it acknowledges the President of India with zero stake as the promoter. Nearly a year ago, ONGC agreed to purchase the government's majority stake in HPCL. By not being classified as a promoter, ONGC is in danger of losing the regulatory exemption from making an open offer to other HPCL's other shareholders, sources said, as per the deal. It could cost ONGC close to Rs 19,000 crore for an additional 26 percent stake in HPCL. Moreover, ONGC only has one nominee on the board of HPCL, while its repeated outbursts on the issue of promoter have been ignored by its subsidiary.
As per the Companies Act, 2013, a promoter is someone having control over the company's affairs, directly or indirectly, be it a shareholder, director or otherwise. ONGC meets this condition of being the HPCL promoter since it is a shareholder with a majority stake and voting rights.