Last week the Hindustan Petroleum Corporation Limited (HPCL) recognised the Oil and Natural Gas Corporation (ONGC) as its promoter in a revised filing with the Securities and Exchange Board of India (SEBI). It could have, and should have, done it long ago as ONGC had acquired the government’s entire stake in early 2018, and, by doing so, ONGC had become the major shareholder in HPCL with more than half the shares.
Why was there so much delay and why did HPCL drag its feet?
Though there were technical reasons and procedural explanations being forwarded by HPCL, it is quite obvious that the top management in HPCL was not willing to give away the almost full-fledged functioning autonomy enjoyed earlier. Using any other words may give some different meaning, however, “functioning autonomy” has often been mistakenly understood to include using one’s position in exercising the so-called “discretion” in a convenient manner suiting one’s preferences and choices. In cases where discretion could be exercised within a certain broad bandwidth – rather than extremely narrow interpretation, or using fully objective criteria – these have been treated as fiefdoms for awarding contracts, giving employments, encouraging cronyism, earning loyalty from subordinates by practising the policy of “quid pro quo”, identifying and creating opportunities for mixing work and leisure with family and friends on company’s expense, etc. Read More
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