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HPCL seems to be finally ready to list ONGC as promoter

An exchange of letters between HPCL and SEBI has shown that the market regulator has asked the PSU to list ONGC as promoter or face action
New Delhi: An exchange of letters between the Securities and Exchange Board of India (SEBI) and Hindustan Petroleum Corporation Limited (HPCL) has shown that the state-run fuel retailer may be now ready to bury the hatchet and finally recognise Oil & Natural Gas Corporation (ONGC) as its promoter. And the deadline set by SEBI to do so is August 13.

What did SEBI say?

In a letter dated August 6, SEBI told HPCL that it will have to revise the status of ONGC as a “promoter,” failing which appropriate action will be initiated. “You are once again advised to re-file the shareholding pattern to the stock exchanges for all quarters since acquisition of shares by ONGC, while revising the status of ONGC as a ‘promoter’ by August 13, 2019, failing which appropriate action will be initiated as per SEBI Act,” SEBI said. “Further, as informed by HPCL vide its email dated June 27, 2019, Government of India has also advised HPCL that ‘President of India’ will continue to be the promoter of HPCL and ONGC to be added as a Promoter below ‘President of India.’ However, HPCL has not abided by the aforesaid direction to revise the status of ONGC as ‘promoter’ till now,” SEBI noted in the letter.

What was HPCL’s response?

In response, HPCL said in a letter dated August 7: “HPCL intends to rectify the shareholding pattern and classification of Promoters by the stipulated date as per the direction from SEBI assuming that the above position is not in violation of any SEBI regulations.” Mail and messages sent to HPCL for an official word on the matter were unanswered. This story will be updated as and when a response is received from the public sector company.

The backdrop

In January last year, ONGC purchased the government’s entire 51.11 percent stake in HPCL for Rs 36,915 crore but HPCL has continued to list ONGC under “public shareholder” category in its regulatory filings. Instead, HPCL has listed President of India, in six shareholding pattern filings since then, as “promoter” without any stake in the company.