IOC, ONGC to appoint experts on board

NEW DELHI: India’s largest explorer, Oil & Natural Gas Corp (ONGC), and the top fuel retailer, Indian Oil Corp (IOC), will appoint lawyers, chartered accounts, IIT professors and prominent IT professionals as independent directors in a move that will boost corporate governance and help the blue-chip firms fulfill guidelines to raise funds from the capital market and exercise greater financial independence with the recently acquired ‘maharatna’ status.

“Our policy is to bring talents who can add value. All five independent directors identified for ONGC and IOC boards are reputed professionals,” a senior oil minister official said requesting anonymity.

A chartered accountant, an IIT-Mumbai professor , a legal professional, and a CEO of an information technology firm are among the shortlisted candidates to fill five ONGC independent directors’ posts, officials having direct knowledge of the matter said. A similar panel is also ready for four IOC vacancies, officials said. They declined to give names as they are yet to be approved by the appointments committee of cabinet (ACC), chaired by the Prime Minister.

The oil ministry expects ACC to approve the appointments by next month, enabling the boards of IOC and ONGC to exercise their ‘maharatna’ powers. Lack of quorum in the board is a major hurdle for IOC and ONGC to exercise their ‘maharatna’ powers despite formally getting the status last week.

On November 16, the government empowered boards of ONGC and IOC to invest up to . 5,000 crore in a project without its approval by elevating them from ‘navratnas’ to ‘maharatnas’ . Full strength of IOC and ONGC boards is also essential as both companies are schedule to hit the market with their respective follow-on public offers by the end of this financial year. As against requirement of 10, the IOC board has six independent directors, company’s spokeswoman said.
Being a state-run company, only the government has powers to appoint directors.

“The administrative ministry (oil ministry) has already initiated the process of inducting the requisite number of independent directors on the board of IndianOil,” she said in an email reply. The company is expecting these appointments before the launch of the FPO.

ONGC has also requested the government for appointment of five independent directors to meet the requirements of listing agreement with the stock exchanges.

“The same is under process,” ONGC spokeswoman said. ONGC board already has four independent directors.