This letter shows the ONGC HPCL ownership tussle is still not over

New Delhi: After a rap on the knuckles from the Securities and Exchange Board of India (SEBI), HPCL had relented in August and re-filed the shareholding pattern of the company, listing Oil and Natural Gas Corp (ONGC) as a 'promoter.' And everyone thought the ONGC HPCL ownership tussle was over. However, a letter, written by former ONGC employees, shows that the hatchet may not have been buried.

Letter giving HPCL Maharatna status not endorsed to ONGC?

In a letter addressed to the ONGC CMD, former ONGC employees referred to an internal office memo issued by the Ministry of Heavy Industries & Public Enterprises that conferred the 'Maharatna' status to HPCL. The letter alleged that a copy of the memo was not endorsed to ONGC, which is HPCL's promoter. "Today (October 23), Ministry of Heavy Industries & Public Enterprises, GoI, has issued a office memorandum, vide No.26(2)/2018-MGMT in which 'Maharatna' status awarded to our ONGC's subsidised company HPCL, but it is surprised, no copy even endorsed to ONGC, 51 percent stake holder (sic.)," the employees claimed. They also asked the ONGC CMD, "How can a wholly subsidiary company get independent 'Maharatna' status, it is difficult to understand?"

'This action is precursor to HPCL disinvestment'

The former ONGC employees also said that HPCL's MK Surana continues to be the Chairman and Managing Director (CMD) of the company when a subsidiary can only have a Managing Director (MD). "Moreover subsidiary can't have a C&MD, can have an MD only, but Mr MK Surana is continuing as C&MD. Even HPCL employees should take this action seriously. This action is precursor to the divestment of HPCL in this fiscal," they said. The HPCL website, till date, continues to list Surana as HPCL CMD. Efforts to contact both HPCL and ONGC management were made. However, no response was received. This story will be updated as soon as an official response is received.

The backdrop

In a letter dated August 6, SEBI had asked HPCL to re-file "the shareholding pattern to the stock exchanges revising the status of ONGC as 'promoter.'" SEBI had 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.'" The ONGC HPCL ownership tussle has been a sticking point between the Petroleum ministry, ONGC and HPCL ever since the deal took place.