PSU Power Firms Fined Rs 59 Lakh for Governance Lapses

The BSE and NSE have collectively imposed fines amounting to Rs 59.17 lakh on three state-owned power companies: NTPC, SJVN, and REC. These penalties stem from the companies’ failure to comply with corporate governance requirements mandated by SEBI’s listing regulations.

Specifically, the non-compliance issues relate to the prescribed composition of their respective boards and the establishment of essential board-level committees. This action highlights the regulatory bodies’ enforcement of governance standards for listed entities in India.

Understanding the Regulatory Breach

SEBI’s listing regulations outline strict guidelines for the structure of company boards, including requirements for independent directors and the formation of various committees such as audit committees and nomination and remuneration committees. These rules are designed to ensure transparency, accountability, and proper oversight within listed corporations.

The fines imposed on NTPC, SJVN, and REC indicate that these companies did not meet these specific stipulations, leading to regulatory action from both major Indian stock exchanges.

Penalties Imposed on Power Giants

NTPC, a prominent power generator, received two fines of Rs 5,36,900 each from the BSE and NSE, accumulating to a total of Rs 10,73,800. The company explained that its board appointments are governed by its Articles of Association, with the President of India, through the Ministry of Power, responsible for appointing or removing directors. NTPC has formally requested the exchanges to withdraw these penalties.

SJVN faced the highest individual penalty, with each exchange levying Rs 13,44,020, resulting in a combined fine of Rs 26,88,040. Similar to NTPC, SJVN attributed the delays in board appointments to the Union government. The company plans to seek a waiver and is engaging with the Ministry of Power to facilitate the appointment of necessary independent directors.

REC was also fined Rs 10,77,340 by each exchange, bringing its total penalty to Rs 21,54,680. This fine was specifically for compliance failures identified during the quarter ending June 30, 2026, underscoring ongoing scrutiny of governance practices.

The Broader Governance Challenge

These incidents collectively underscore a persistent governance challenge for government-controlled listed entities in India. Their adherence to critical board structure regulations often depends on the timely appointment decisions made by the government.

The regulatory action taken by BSE and NSE against these state-owned power companies highlights the systemic issue where governmental control over key appointments can complicate compliance with independent director requirements, creating recurring hurdles for public sector undertakings.