HPCL adamant, refuses to accept ONGC as promoter despite having 51% stake

Hindustan Petroleum Corp (HPCL) has refused to budge and recognise ONGC as its promoter in a big snub to the upstream oil explorer that has spent Rs 36,915 crore to buy 51.11 per cent government stake in the refiner this year.

Responding to a communication from Oil and Natural Gas Corporation  asking HPCL to change its status post-acquisition, the refiner has clarified that its stand is based on the understanding of the statute that does not recognise the new majority shareholder as its promoter.

"Whatever we are doing, whatever we have done and whatever we will be doing will be as per our understanding of the statute and the guidelines and Companies Act and the Sebi (Securities and Exchange Board of India) guidelines. Beyond that, who is interpreting whatever, it is their understanding of the situation. We need not subscribe to that," HPCL chairman and managing director Mukesh Kumar Surana told reporters virtually rejecting ONGC's demand.

The issue came to light after a quarterly result filing by HPCL on stock exchanges where the refiner clubbed ONGC among “public shareholders”, while still mentioning the President of India (read Union government) as its promoter with 0 per cent stake. The mistake was repeated again in a regulatory filing to the stock exchanges on July 12. This immediately attracted reaction from ONGC that asked the refiner to rectify its stock exchange filings to reflect the true promoter after government exit.

ONGC had in January this year bought the government's stake in HPCL for Rs 36,915 crore. Post that, HPCL had become a subsidiary of ONGC.

Asked about ONGC's request, Surana said, "Everybody is free to express their views... Our actions will be guided by what we think is right."

Sources said ONGC feels the HPCL management is bound to take corrective action to reflect the true picture.