NEW DELHI: State-run engineering giant Bharat Heavy Electricals Limited (BHEL) has been hit with monetary penalties by India’s premier stock exchanges, BSE and the National Stock Exchange (NSE), for failing to comply with crucial regulatory norms governing board composition and independent director requirements.
According to an official regulatory disclosure filed by the company on May 28, 2026, both stock exchanges imposed separate fines of ₹5,49,880 each (inclusive of GST), bringing the total cumulative penalty to nearly ₹11 Lakhs for the quarter ended March 2026. The fines were levied due to non-compliance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Key Areas of Non-Compliance
The punitive actions stem from violations across multiple corporate governance benchmarks under SEBI LODR norms:
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Regulation 17 (Board Composition): As of March 31, 2026, the company fell short of the mandate requiring at least 50% of the actual board strength to consist of Independent Directors. This shortfall also impacted the mandatory requirement to have at least one independent woman director.
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Regulations 18 & 19 (Committee Violations): While BHEL’s Audit Committee and Nomination and Remuneration Committee (NRC) were fully compliant for most of the quarter, they fell into non-compliance on March 28, 2026.
The Root Cause: Vacancies Trigger Violations
The company clarified that the structural breach was triggered late in the financial quarter. On March 27, 2026, two Independent Directors successfully completed their respective tenures and stepped down.
This departure left just a single Independent Director remaining on the entire Board starting March 28, 2026, automatically making the composition of both the Audit Committee and the NRC non-compliant with Regulations 18(1) and 19(1) of the SEBI framework.
BHEL Cites PSU Status; To Seek Waiver
Defending its position in the regulatory exchange filing, BHEL—a prominent Central Public Sector Enterprise (CPSE)—emphasized that the power to appoint directors does not rest with the company’s internal management.
“The company is a Government of India enterprise, and appointments of Directors, including Independent Directors, are made by the Government,” BHEL noted in its statement. “The company is regularly taking up the matter with the Government of India for appointment of the requisite number of Independent Directors to ensure compliance.”
Moving forward, BHEL indicated that it intends to formally appeal the penalties. The public sector undertaking plans to request a full waiver of the fines from the stock exchanges, leveraging the standard operating procedure (SOP) guidelines established by the exchanges for public sector entities caught in appointment delays.
The regulatory disclosure detailing the board status was officially authorized and signed by BHEL’s Company Secretary, Dr. Yogesh R Chhabra.
