Rail Vikas Nigam Ltd (RVNL) – a PSU under the Rail Ministry – has been fined nearly ₹11,00,000 by the bourses, NSE and BSE, for “non-compliance of regulation(s)”, wherein half of the company’s Board did not consist of requisite independent directors, including the women member.

As per senior officials, RVNL a fine of ₹542,800 (including GST) was imposed by the BSE; and a similar amount was imposed by NSE. Fines were imposed for the period ending September 30.

Non-compliance issue

This is the second time this fiscal that the company was fined by bourses for non-compliance. In August, the NSE and the BSE both imposed fines of ₹563,900 each (inclusive of GST) for failure to have independent directors (for half its Board) for the quarter ending June 30 (Q1FY25).

However, RVNL is not responsible for appointment of independent directors. They are appointed by the Ministry of Railways.

On December 3, RVNL in a response the bourses said, the company was “continuously” following up with the Ministry of Railways about vacancy of independent directors (including one woman director).

“Several reminder letters have been sent.... to take immediate action in respect of appointment of independent directors and being a government company, company (RVNL) has no role to play in the appointment of Directors,” it said.

The last updated Board of RVNL, as per a disclosure in BSE, comprise eight members that include Pradeep Gaur as CMD, Vinay Singh as Director (Projects), Sanjeeb Kumar as Director (Finance) & CFO, Anupam Ban as the Director (Personnel), Mritunjay Pratap Singh as the Director (Operations), NC Karmali (Part-time official) Director, Prem Sagar Gupta (Part-time official) Director and Anupam Mallik (Part-time non official) Director.

Changes being made

A Railway Ministry official said the Ministry has been apprised and corrective action was being taken.

A Railways spokesperson told businessline that appointment of independent directors in the CPSCs under MoR is governed by the “Guidelines regarding board-level appointments in Central public sector undertakings issued by DOPT.

As per these guidelines, certain educations qualifications, experience and age are prescribed to be eligible for independent directors.

“The tenure of the independent directors is 3 years. The last selection of independent directors in all CPSCs of Ministry of Railways was done during June 2023.  Some of the directors who were appointed in 2021 have completed their tenure recently,” he said.

According to the spokesperson, the selection of independent directors is a continuous process based on the vacancies “and Ministry is on the job of taking up necessary action for fresh appointments”.

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