NALCO seeks waiver of ₹14.13 lakh penalty for SEBI compliance gaps
- NALCO requested waiver of ₹14.13 lakh penalty from BSE and NSE
- Fine imposed for non-compliance with SEBI LODR Regulations in Q2FY26
- Company cites lack of control over Independent Director appointments
- Non-compliance involves Regulations 17, 18, 19, 20, and 21 of SEBI LODR
*this image is generated using AI for illustrative purposes only.
National Aluminium Company Ltd has requested stock exchanges to waive a ₹14.13 lakh penalty imposed for non-compliance with corporate governance regulations. The company attributes the lapse to its status as a Central Public Sector Enterprise (CPSE), where director appointments are controlled by the Government of India.
The penalty, totaling ₹14,13,340 (including GST), was levied by the Bombay Stock Exchange and the National Stock Exchange for violations of specific provisions under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The non-compliance relates to the quarter ended June 30, 2026.
Governance constraints cited in waiver request
In its submission dated October 13, 2026, NALCO clarified that it lacks authority over the appointment of Independent Directors. As a CPSE, the power to appoint directors is vested with the President of India, not the company’s board or management. Consequently, the company argued that it could not independently ensure compliance with regulations requiring a specific number of independent directors.
The company informed its promoter, the Ministry of Mines, on August 31, 2026, requesting expedited action to appoint the requisite number of Independent Directors. NALCO stated that the matter is being continuously pursued with the administrative ministry to meet statutory requirements under both the Companies Act, 2013, and SEBI LODR Regulations.
Specific regulatory violations
The exchanges flagged non-compliance with multiple sections of the SEBI LODR Regulations. These include:
- Regulation 17(1) and 17(2A): Composition of the Board of Directors.
- Regulation 18(1): Audit Committee composition.
- Regulation 19(1)/(2): Nomination and Remuneration Committee.
- Regulation 20(2)/(2A): Stakeholders Relationship Committee.
- Regulation 21(2): Risk Management Committee.
The Board of Directors took cognizance of these communications during its 371st meeting held on September 25, 2026. The Board advised that the exchanges be informed about the company's CPSE status and the lack of control over director appointments.
What the Numbers Show
The financial impact of the regulatory breach is quantified as follows:
| Component | Amount |
|---|---|
| Basic Fine | ₹12,13,000 |
| GST @ 18% | ₹2,00,340 |
| Total Penalty | ₹14,13,340 |
The total penalty represents a minor fraction of NALCO's overall financial scale but highlights a structural dependency in CPSE governance. The divergence between the company's operational autonomy and its regulatory obligations underscores a systemic challenge for state-owned enterprises where board composition is dictated by political or bureaucratic timelines rather than corporate governance mandates.
Historical Stock Returns for NALCO
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +3.28% | -5.59% | -11.08% | -23.02% | +43.11% | +216.41% |
Will SEBI establish a standardized waiver protocol for CPSEs facing governance delays due to government appointment bottlenecks?
How might this precedent influence the compliance strategies of other major Central Public Sector Enterprises currently facing similar director vacancies?
Could persistent non-compliance lead to stricter regulatory interventions or delisting risks for state-owned enterprises despite their government backing?
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