Why Did NSE and BSE Impose a Fine of Rs 5.42 Lakh on MTNL?
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Synopsis
In a recent development, MTNL has faced a fine of Rs 5.42 lakh from NSE and BSE for non-compliance with board composition regulations. This article explores the implications and the company's efforts to rectify the situation.
Key Takeaways
- MTNL has been fined Rs 5.42 lakh for board composition non-compliance.
- The fine includes a basic penalty and GST.
- MTNL must appoint four more independent directors to meet regulatory requirements.
- The Department of Telecommunications is responsible for board member appointments.
- MTNL is appealing for a waiver of the fines imposed.
Mumbai, Nov 30 (NationPress) The state-run telecommunications entity MTNL has incurred a penalty of Rs 5.42 lakh from the stock exchanges NSE and BSE due to its failure to adhere to the regulations governing its board's composition.
The exchanges highlighted that MTNL did not comply with Regulation 17(1) of SEBI's Listing Obligations and Disclosure Requirements (LODR), which stipulates the necessity of having a specified number of independent directors on the board.
In a regulatory announcement, MTNL acknowledged that it must appoint an additional four independent directors to fulfill these requirements.
“In conformity with Regulation 30 of SEBI (LODR) Regulations, 2015, and in line with Sub-Para 20 of Para A of Part A of Schedule III, we inform you that MTNL has received a letter dated 28.11.2025 from BSE regarding its non-compliance with Regulation 17(1) of SEBI (LODR) Regulations, 2015, specifically concerning board composition requirements,” the company stated in its filing.
Nevertheless, it has been unable to appoint these directors since all board members are selected by the Department of Telecommunications (DoT), as MTNL is a public sector entity.
The penalty comprises a basic fine of Rs 4.6 lakh plus an additional 18% GST, totaling Rs 82,800.
“Consequently, both NSE and BSE have levied fines on MTNL amounting to Rs 5,42,800/- (this includes the basic fines of Rs 4,60,000/- and GST @ 18% amounting to Rs 82,800/-),” it added.
MTNL also reported that the DoT had appointed two independent directors, including one female independent director, on April 15, 2025.
The company has already requested the government to appoint the remaining four independent directors as mandated.
Additionally, MTNL has appealed to both NSE and BSE to consider waiving the imposed fines.
Point of View
It is crucial for public sector undertakings like MTNL to strictly adhere to governance norms. The imposition of fines by NSE and BSE underscores the importance of independent oversight in corporate management. MTNL's efforts to comply with regulations reflect a commitment to transparency, but the dependence on the DoT for appointments raises concerns about timely compliance.
NationPress
30/11/2025
Frequently Asked Questions
What is the fine amount imposed on MTNL?
MTNL has been fined a total of Rs 5.42 lakh by NSE and BSE for failing to meet board composition norms.
Why was MTNL fined?
The fine was imposed due to MTNL's non-compliance with Regulation 17(1) of SEBI’s Listing Obligations and Disclosure Requirements.
How many independent directors does MTNL need to appoint?
MTNL is required to appoint four additional independent directors to comply with the regulations.
Who is responsible for appointing the board members of MTNL?
All board appointments for MTNL are made by the Department of Telecommunications (DoT).
Has MTNL taken any steps to address this issue?
Yes, MTNL has requested the government to appoint the necessary independent directors and is asking NSE and BSE to waive the fines.
