The government plans to scale down its representatives on the board of Oil and Natural Gas Corp (ONGC) before the December 31 deadline set by Sebi to meet clause 49 listing requirement, said Petroleum Secretary S C Tripathi.Petroleum ministry recently appointed two more government on the ONGC board, taking the number of government directors, which Sebi treats as executive or functional directors, to 5. After considering 6 functional directors, the ONGC board of 14 only has space for 3 independent directors."We have time till December (to comply with clause 49). We may reduce the number of government directors on ONGC board," Tripathi told reporters.Besides, names of 4-5 independent directors have been cleared for appointment on ONGC board soon, Tripathi said.Stating that the ministry had petitioned Sebi to treat government directors as independent directors, Tripathi said if the Sebi does not subscribe to the view "some government director position may be reduced."Sources said ONGC Chairman and MD Subir Raha has already written twice in as many months to the Petroleum Secretary S C Tripathi for "taking necessary steps to increase number of independent directors to have an optimum combination as required under clause 49 and/or to reduce the number of government nominee directors." "According to the definition of independent director, ex-officio government nominee directors and the nominee of IOC cannot be treated as independent directors. Only the three non-official part-time directors qualify the definition of independent directors," an official said.Failure to comply with clause 49 (corporate governance) of Sebi's listing agreement is punishable with imprisonment of upto 10 years or a fine of upto rs 25 crore or both. Besides, stock exchanges can suspend the dealing/trading of securities.
