Rail Vikas Nigam Limited ( rail vikas nigam ) has been fined ₹5,36,900 each by the National Stock Exchange of India Limited (NSE) and BSE Limited for breaching board composition norms in the quarter ended March 31, 2024. This penalty follows a similar fine imposed for the subsequent quarter ended June 30, 2024, bringing the total regulatory fines for these two quarters to ₹21,47,600. The penalties arise from the company’s failure to maintain the statutory requirement that half of the Board must comprise independent directors, including at least one woman Independent Director, as per Regulation 17(1) of the SEBI (LODR) Regulations, 2015.

The exchanges issued the fines for the Q4FY24 breach via letters and emails dated May 22, 2024. Management stated that the penalties have no material effect on the company’s financials, operations, or other activities. The disclosure was made pursuant to Regulation 30 read with Para-A of Part-A of Schedule-III of the SEBI (LODR) Regulations, 2015.

Regulatory Context and Company Response

In response to the Q4FY24 penalties, Rail Vikas Nigam clarified its position in a letter dated May 23, 2024, submitted to both exchanges. The company emphasized its status as a Government company under Section 2(45) of the Companies Act, 2013. Under this provision, the power to appoint Directors, including Independent Directors, rests with the President of India rather than the company itself.

All directors at Rail Vikas Nigam are appointed by the Government of India through its Administrative Ministry, the Ministry of Railways (MoR). Consequently, the company stated it has no role in the appointment process, which contributed to the delay in achieving the required independent director composition. The company requested the exchanges to waive off the fine based on this structural constraint.

Penalty Breakdown

Kalpana Dubey, Company Secretary & Compliance Officer, signed the disclosures on behalf of the company.

What the Numbers Show

The imposition of consecutive fines for Q4FY24 and Q1FY25 highlights persistent structural challenges faced by public sector undertakings in adhering to SEBI’s stringent corporate governance timelines. The inability to independently control director appointments creates a dependency on government administrative processes, leading to compliance gaps despite operational readiness. While the monetary impact is negligible relative to Rail Vikas Nigam’s scale, the repeated breaches underscore the tension between statutory corporate governance requirements and the centralized appointment mechanisms governing central public sector enterprises.

Rail Vikas Nigam Limited ( rail vikas nigam ) has appointed N. C. Karmali as an Additional Director on its Board, effective May 20, 2024. The Board of Directors approved the appointment in accordance with the Companies Act, 2013. Karmali joins as a Part-time (Official) Government Nominee Director, bringing his experience from the Railway Board to oversee the infrastructure developer’s strategic initiatives.

The appointment was communicated to stock exchanges on June 7, 2024, following an initial announcement on May 20, 2024. In compliance with SEBI Circular No. LIST/COMP/14/2018-19 dated June 20, 2018, the company confirmed that Karmali is not debarred from holding office by any SEBI order or other authority. He also confirmed that he is not related to any existing Director or Key Managerial Personnel (KMP) of Rail Vikas Nigam Limited.

Profile of N. C. Karmali

N. C. Karmali is an Indian Railways Service of Engineers (IRSE) Officer from the 1990 batch. He holds a B. Tech (Hons) in Civil Engineering from IIT Kharagpur and completed a Leader Programme in Urban Transport Planning at the Korean Transport Institute in South Korea.

His career includes significant roles within Indian Railways:

• May 2007 – March 2023: Served at various reputed posts in Kolkata.
• April 2023 – March 2024: Chief Engineer / Construction, Indian Railways, Bilaspur, handling railway construction projects.
• Current Role: Executive Director (Coord.) / Gati Shakti, Railway Board, New Delhi.

Karmali holds no equity shares in Rail Vikas Nigam Limited.

Updated Board Composition

With Karmali’s addition, the Board of Directors now comprises nine members. The updated list of directors is detailed below:

What This Means for Governance

The addition of a senior Railway Board official strengthens the government’s oversight of Rail Vikas Nigam Limited’s operations. As a part-time nominee, Karmali will contribute expertise in railway construction and urban transport planning, aligning with the company’s core business of railway infrastructure development. His background in coordinating Gati Shakti initiatives may also support integrated project execution strategies.