BSE and NSE Fined IRCON Over Lack of ‘Independent’ Board Members

The BSE and NSE stock exchanges have fined Rs 10,85,600 on the Railways Ministry PSU Ircon International Limited (IRCON), due to failure to ensure that at least half of the company’s board consists of Independent Directors. In a regulatory filing on Wednesday, IRCON stated, ” it is to inform that National Stock Exchange (NSE) of India Limited and BSE Limited (BSE) vide their letters/ e-mail dated 21st November, 2023 have levied a fine of Rs 5,42,800 each (incl GST) on the Company for the non-compliance with Regulation-17(1) i.e., half of the Board was not independent, for the quarter ended 30th September, 2023.”

“The fine levied by NSE and BSE has no impact on the financial, operation or other activities of the Company,” stated IRCON.

In response, IRCON clarified in a letter dated November 22 that it has no authority in appointing Independent Directors. The regulatory filing stated, “The Company, vide its letter dated 22nd November, 2023, has clarified to NSE and BSE that IRCON International Limited (IRCON) is a government company as per provisions of the Section 2(45) of the Companies Act, 2013. As per provisions of the Companies Act, 2013 and Articles of Association of the Company, the President of India vests with the power to appoint Directors (including Independent Director) on the Board of IRCON. All Directors in IRCON are appointed by the Government of India through its Administrative Ministry, Ministry of Railways (MoR) and IRCON has no role to play in the appointment of any Director unless nominated by the Government of India.”