ONGC, IndianOil boards clear commission to directors by Petronet
New Delhi   18-Mar-2008
The boards of directors of Oil and Natural Gas Corporation (ONGC) and IndianOil have given their green light for payment of commission of Rs l0.44 lakh each to their directors by Petronet LNG Ltd (PLL). Offshore Director, NK Mitra, and BM Bansal, Director Planning and Business Development, represent ONGC and IndianOil, which hold l2.5% each in the PLL, respectively. The applicable tax on this income would have to be borne by Mitra and Bansal. ONGC IndianOil sources told FE, "Our boards of directors have given a no-objection for accepting commission by our directors from PLL However, so far neither Mitra nor Bansal have accepted the payments. Other members of the PLL board of directors are from GATL India and Bharat Petroleum Corporation ltd (BPCL) and they have yet to take a call on the issue,". The PLL board had announced the commission for 2006-07 on June l4, 2007, of .5% of the profit after tax of Rs 313.25 crore) 1for distribution to director’s holding die office of director during the year 2006-07 in equal proportion. The directors on the board for that part of the year were to divide the amount proportionately. This is as per the Companies Act, which says that commission on profits is payable on profit before tax. Interestingly, ONGC and IndianOil have amended the Conduct, Discipline and Appeal (CDA) rules so that Mitra and Bansal can accept the money. According to CDA rules, no employee of an Indian PSU can undertake part-time work for a private or public body or persons or accept fees without sanction of the authority. However, it also states that the competent authority, in cases were it thinks fit to grant such sanction, stipulate the amount of fees received by an employee for undertaking the work.