ONGC, ministry face-off over MRPL appointments

Oil and Natural Gas Corporation (ONGC) and the ministry of petroleum are once again heading for a showdown on the appointments of directors. This time it is for the board of Mangalore Refinery and Petrochemicals Ltd, a subsidiary of ONGC.

Senior officials said ONGC chairman and managing director Subir Raha, who is also the chairman of MRPL, has been involved with an extensive exchange of letters with the ministry.

Officials said the contentious issues were mainly three. Nomination of managing director and director (finance) on the MRPL board, appointment of two government directors and the ministry's insistence that the board do not take any "major" decisions till the constitution of the full board.

MRPL was taken over by ONGC after the exit of Hindustan Petroleum Corporation and the Aditya Birla group in March 2003. After the takeover, directors representing HPCL and the Birlas put in their papers. ONGC currently holds 71.62 per cent in MRPL.

With regard to filling up the vacancies for fulltime directors including the managing director, officials said the ministry wanted the date of vacancy should be December 2004, while MRPL had taken a stand that it should be March 2003 when the two HPCL and Birla directors resigned.

This would affect the shortlisting of names for the posts since the eligible candidate should have at least two years from the date of vacancy before he achieves superannuation.

Senior MRPL executives said the government did not approve the filling of vacancies even after the company acquired PSU status with the Cabinet approval more than two years back. "The government woke up on the appointment only in January this year," said an executive.

On the issue of the existing MRPL board not taking ay major decision pending its reconstitution, he said the Companies Act made no such distinction and the importance of a decision was a matter of subjective decision. "Besides, the board was never dissolved and, therefore, the question of dissolution never arose," he said.

With regard to the appointment of government directors on the MRPL board, Raha in his reply pointed out that both the nominees did not represent the finance wing of the government which was against the established practice.

This could either mean a representative of the petroleum ministry from its finance wing or that from the ministry of finance.