Though oil refiner-retailer Hindustan Petroleum Corporation (HPCL) was taken over by Oil and Natural Gas Corporation (ONGC) in January this year, the former is yet to recognise the upstream major as its promoter in the mandatory quarterly filings with the stock exchanges.
In the filings for Q4FY18 and Q1FY19 on both the BSE and NSE, HPCL clubbed ONGC which owns its 51.11% share among “public shareholders” while still mentioning the President of India (read the Union government) as its promoter with 0% stake.
The “deviation” has caused much heartburn in ONGC and it has already approached the government for a resolution of the issue, sources said. The explorer had to fork out `36,915 crore to acquire a majority stake in the oil marketing company on being prodded by the government, which wanted to boost its non-debt capital receipts.
An ostensible purpose of the deal was to further the government’s policy of creating an integrated oil major to compete with global and domestic private players.
According to the sources, minority shareholders of ONGC could also raise the matter with the oil explorer’s board. “The matter is creating a lot of confusion,” an official said.
HPCL’s move has no immediate precedent. After Indian Oil Corporation (IOC) bought a majority stake (51.89%) )in Chennai Petroleum Corporation in 2000-01, CPCL showed IOC as the promoter.
Emails sent by FE to ONGC and HPCL remained unanswered till the time of going to press.
Having acquired a controlling stake in HPCL, ONGC should be classified as promoter of the oil retailer according to Securities and Exchange Board of India rules, said Prithvi Haldea, chairman, PRIME Database. Though ONGC was not the original promoter, after it acquired a controlling stake in HPCL, it is deemed as promoter, he added.
According to government sources, HPCL’s reluctance to identify ONGC as a promoter could be the outcome of a battle of egos at the helms of the two state-run entities.
Prior to acquisition, HPCL was on the Fortune Global 500 list ranked 384 (2016) while ONGC was not on the list. Thanks to its majority stake in HPCL, ONGC is now ranked 197 (2017) on the list. The Fortune Global 500 is an annual ranking of the top 500 corporations worldwide as measured by revenue and the list is compiled and published annually by Fortune magazine.