Summary:
Mahanagar Telephone Nigam Limited (MTNL) has been fined Rs 6.73 lakh by both the NSE (National Stock Exchange) and BSE (Bombay Stock Exchange) for failing to comply with SEBI’s LODR (Listing Obligations and Disclosure Requirements) regulations. The penalty was imposed due to gaps in board composition, including the absence of a woman director and non-compliance in key committees.
The state-run telecom operator, Metropolitan Telephone Nigam Limited (MTNL) is punished by NSE, BSE stock exchanges for non-governance of corporate administration criteria. The exchanges imposed a fine of Rs 6.73 lakh on MTNL, after finding out that the company did not follow the provisions of SEBI (LODR) Regulations, 2015. The violation includes failure to appoint a female director on the board, unfair constitution of the audit committee, and other compulsory committees such as nomination and remuneration committee to Remuneration Committee, Remuneration Committee, Stakeholder Relationship Committee, and the Risk Management Committee.
In its filing, MTNL clarified that as a public sector undertaking (PSU), all appointments in its board- including independent directors- are managed by its Administrative Ministry, Department of Telecommunications (DoT). The company further mentioned that corrective action has already begun, DoT has appointed two independent directors, including a female director, effective from April 15. MTNL also said that the appointment of four more independent directors is currently under consideration with the Center.
This development also highlights the increasing focus of SEBI and Indian stock exchanges on ensuring corporate administration compliance among public sector enterprises. For MTNL, which is struggling with financial challenges and a declining customer base, it underlines the need to strengthen its governance structure to align with fine regulatory standards and investors.
