The ministry of petroleum has asked the market regulator, Sebi, to drop the adjudication proceedings initiated against its three-navratana oil PSUs—ONGC, IOC and GAIL for non-compliance of Clause 49 of the listing agreement.

Responding to Sebi?s show cause notices to ONGC, GAIL and IOC, petroleum secretary MS Srinivasan has asked Sebi chairman M Damodaran to give some more time to oil PSUs to comply with the regulatory requirement of requisite number of non-official directors on their boards.

Assuring Damodaran that action has already been initiated to have 50% non-official directors on the boards of oil PSUs in line with the Sebi?s guidelines, Srinivasan said.

?Compliance with the regulatory requirements will take a little more time. I hope you will appreciate the position and will consider dropping the adjudication proceedings against ONGC, IOC and GAIL.?

Sebi had issued show cause notices to ONGC, IOC and GAIL under Rule 4 of the Securities Contract (Regulation) Act for holding an enquiry and imposing penalties as the companies have failed to comply with Clause 49 of the listing agreement.

As per Clause 49 1 (A), the board of directors of the company should have an ?optimum combination of executive and non-executive directors with not less than 50% of the board of directors comprising of non-executive directors. Further, where the chairman of the board is a non-executive director, at least one-third of the board should comprise of independent directors and if he is a executive director, at least half of the board should comprise of independent directors.?

However, at present the number of non-official (independent) directors on the board of ONGC, IOC and GAIL have been kept at 33%, which is a clear violation of the Clause 49 1 (A) of the listing agreement.