Yet another keenly watched quarterly share holding pattern announcement from Hindustan Petroleum Corporation Ltd (HPCL) has failed to provide clarity on its promoter after Oil and Natural Gas Corporation Ltd (ONGC) bought the government’s 51.11 per cent stake in the Mumbai-based state-run oil refiner for ₹ 369.15 billion in January 2018.
For six consecutive quarterly share holding pattern filings to the stock exchange since then including the latest for the quarter ended June, HPCL has listed ONGC as a public share holder. Under the promoter/promoter group category, even the President of India does not hold any shares in HPCL now.
Interviews for two director level posts of finance and marketing at HPCL held by the government’s head hunter, the Public Enterprises Selection Board (PESB), on June 17 and July 4 respectively had raised hopes that the government had at last fixed the ‘promoter’ issue at HPCL post its stake sale to ONGC.
On June 17, Shashi Shanker, the Chairman and Managing Director of ONGC, sat on the interview panel of PESB to select a new finance director at HPCL. And, on July 4, Shanker again sat on the PESB panel to select a new marketing director for HPCL. M K Surana, the Chairman and Managing Director of HPCL, was conspicuous by his absence from the interview panel, which was seen as an indication that HPCL has at last recognised ONGC, a maharatna PSU, as its promoter.
For selecting a director of a company where the government or its controlled company has more than 50 per cent stake, a PESB panel holds interview from among shortlisted candidates. The panel is assisted by the Secretary of the administrative ministry concerned and the Chairman of the company. In the case of subsidiaries, the full-time Chairman of the holding Company is invited to assist the PESB in the selection of a director, according to guidelines issued by the Department of Personnel.
Surana has retained the title of Chairman and Managing Director of HPCL - a navratna PSU- despite corporate governance structure requiring a group having just one chairman and subsidiaries being run by managing directors and CEOs. This had baffled corporate watchers who reckon that the government did not envisage such a scenario when it sold it’s stake in HPCL to ONGC to boost disinvestment mop-up.
ONGC's overseas subsidiary, ONGC Videsh Ltd, is headed by a Managing Director and CEO. Its listed refinery subsidiary Mangalore Refinery and Petrochemicals Ltd (MRPL) is also led by a Managing Director and CEO. ONGC Chairman is the Chairman of the board of both the companies.
Appointments
The PESB panel picked HPCL’s executive director R Kesavan for the role of finance director from a short-list of nine candidates that included five from HPCL. For the role of marketing director, PESB picked HPCL’s executive director (LPG) Rakesh Misri from a short-list of ten candidates of which six were from HPCL. The PESB recommendations now need to be signed off by the ministry of petroleum and natural gas which controls the state-run oil firms.
