REC Seeks Waiver Of Fines Over Board Composition Issues, Cites Govt Control

REC has requested stock exchanges to waive fines imposed for breaching corporate governance norms, stating that the appointment of directors is the prerogative of the government and outside the company's control.

Both the National Stock Exchange and BSE had levied fines of ₹613,600 each for REC’s failure to comply with several Securities and Exchange Board of India norms related to listing obligations and disclosure requirements. These included non-compliance with the mandatory appointment of a woman director and delays in constituting key committees such as audit, nomination and remuneration, and risk management.

The exchanges issued the penalty notices on March 17, flagging violations up to the end of the December quarter.

In an exchange filing, REC said its board has asked the exchanges not only to waive the fines but also to refrain from imposing any further penalties, arguing that the lapses were beyond the company’s control and did not stem from any wrongdoing on its part.

The board has also directed management to follow up regularly with the Ministry of Power to speed up the appointment of the required number of independent directors.