BSE, NSE Impose Rs6.73 Lakh Penalty Each on MTNL for Failing To Appoint Woman Director, Committees

Moneylife Digital Team 01 September 2025

Investor Interest

State-run telecom operator Mahanagar Telephone Nigam Ltd (MTNL) has been penalised by BSE and the National Stock Exchange (NSE) for lapses in compliance with corporate governance rules under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

In a regulatory filing, MTNL says that both NSE and BSE had imposed penalties of Rs673,780 each on the company. The fines include a basic amount of Rs571,000 along with goods and services tax (GST) of Rs102,780.

The Exchanges cited violations of multiple provisions under SEBI (LODR), including Regulation 17(1), 18(1), 19(1)/19(2), 20(2)/(2A), and 21(2). These relate to MTNL's failure to appoint a woman director on the board, non-compliance with the constitution of the audit committee, non-compliance with the nomination and remuneration committee, non-compliance with the stakeholders relationship committee, and non-compliance with the risk management committee.

MTNL, in its filing, clarified that as a public sector undertaking (PSU), all appointments, including independent directors, are made by the department of telecommunications (DoT) under Union ministry of communications. The company pointed out that two independent directors, including a woman independent director, were appointed by DoT on 15 April 2025. The matter of appointing four more independent directors has already been taken up with the government, it added.

The telecom PSU also said it has requested both NSE and BSE to waive the penalties, citing its dependence on the administrative ministry for board-level appointments.

MTNL has been struggling financially for several years and is dependent on government support for survival. The latest penalty underscores ongoing governance compliance challenges faced by state-owned enterprises where board appointments are controlled by ministries rather than the company itself.

Comments

User

david.rasquinha

3 months ago

Like SEBI, both the NSE and the BSE are ducking the real issue here. In the case of most, if not all, PSUs, the appointing authority for Board Directors is the GOI through the administrative ministry. All PSUs are required to submit every month a statement to their administrative ministry showing the position of existing Board vacancies as well as upcoming / anticipated vacancies. These monthly statements are sent; what happens next is beyond the control of the PSU. Fining the PSU is meaningless and counter-productive. WIll the NSE or the BSE have the courage to suspend trading in the stock till the position is corrected? I think we all know the answer.