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ONGC FPO date after appointment of independent directors

business Updated: Dec 04, 2011 11:49 IST

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The finance ministry will decide on the date of the follow-on offer of Oil and Natural Gas Corp (ONGC) after the government appoints independent directors for the state-owned company.

"We will file draft papers again once the requisite number of independent directors are appointed on ONGC board," a finance ministry official said.

The government had planned to conclude the ONGC share sale by the third quarter this fiscal, but had to postpone it because of weak stock markets and failure to meet the norms on the required independent directors.

As per clause 49 of the Sebi regulations, half of the company's board should comprise of independent directors.

Three of ONGC's independent directors -- S Balachandran, S S Rajsekar and Santosh Nautiyal -- retired on November 10 after the three-year term.

The official said the Department of Disinvestment (DoD) is awaiting approval of the cabinet committee on appointments (ACC) for the new independent directors on the ONGC board.

DoD is understood to have asked the ministries concerned to fast-track appointment of independent directors, so that they can move ahead with the stake sale programme.

Last month, ONGC withdrew the draft prospectus filed with market regulator Sebi shortly before the 90-day deadline. ONGC had filed the FPO prospectus in September.

The government plans to sell 5% stake, or 427.77 million shares, in the company. The government's holding is expected to come down to 69.14% from the current 74.14% after the sale.

The post of independent directors is also lying vacant in other disinvestment bound PSUs -- BHEL, RINL, Hindustan Copper and NBCC.

BHEL, which has already filed draft papers with Sebi on September 30 for Rs 4,000 crore FPO, needs two more independent directors on board.

Besides, Rashtriya Ispat Nigam Ltd (RINL) needs three more independent directors, while HCL needs five to meet the listing norms to meet the Sebi requirement.

As against the disinvestment target of Rs 40,000 crore in the current fiscal, the government has so far raised only Rs 1,145 crore.