REC Limited disclosed that its Board addressed fines levied by stock exchanges for non-compliance regarding the composition of its Board of Directors for the quarter ending December 31, 2025. The Board requested the Ministry of Power to expedite the appointment of requisite Independent Directors. Furthermore, REC formally requested that the exchanges waive the imposed fines, arguing that director appointments are beyond the company’s control.
Response to Exchange Fines for Board Composition Lapses
REC Limited issued a formal communication dated March 18, 2026, addressing non-compliance penalties received from the National Stock Exchange (NSE) and BSE. The non-compliance pertained to the composition of the Board of Directors for the quarter ended December 31, 2025, as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The company’s Board of Directors noted the non-compliance during its meeting on March 16, 2026, and acknowledged the associated fines levied by the stock exchanges.
Board’s Appeal for Fine Waiver
The Board passed resolutions directing immediate follow-up with the appointing authority, the Ministry of Power, Government of India, to expedite the appointment process for the necessary number of Independent Directors.
Crucially, the Board desired that stock exchanges be requested to waive the imposed fines and refrain from levying future penalties. REC argued that the matter of appointing Independent Directors is entirely beyond the control of the Company and does not constitute a violation on REC’s part, especially since, as a Government Company, the power to appoint these directors rests with the President of India via the Ministry of Power.
Details of Fines Imposed
Both exchanges levied significant penalties primarily focused on Regulation 17(1) concerning board composition.
National Stock Exchange (NSE) Levy
The NSE notice, dated February 27, 2026, detailed a total fine payable of ₹542,800 (inclusive of GST @ 18%). This amount stemmed largely from a 92-day period of non-compliance under Regulation 17(1), calculated at ₹5,000 per day, totaling a basic fine of ₹460,000.
- Total Basic Fine: ₹460,000
- GST @ 18%: ₹82,800
- Total Payable: ₹542,800
The NSE also advised REC to ensure compliance is achieved immediately, as fines continue to accrue daily until rectification is confirmed.
BSE Levy
The BSE correspondence, also dated February 27, 2026, detailed fines totaling ₹542,800 (inclusive of GST @ 18%) for non-compliance under Regulation 17(1). Similar to the NSE, the basic fine amounted to ₹460,000 due to 92 days of non-compliance.
However, the BSE report indicated zero liability for non-compliance related to Regulation 17(1A) (age of non-executive directors), Regulation 17(2) (Board meeting quorum), Regulation 18(1) (Audit Committee), among others, suggesting these specific breaches were either rectified or had no applicable charge for the quarter.
Action Plan and Submission Requirements
Both exchanges mandated that REC must file a waiver request via the NEAPS portal (NEAPS>>Compliance>>Fine Waiver>>Waiver Request). A prerequisite for processing any waiver application is that the underlying non-compliance must first be achieved.
REC was instructed to place the details of the non-compliance and the Board’s comments before the Board in the next meeting and inform the Exchange using the announcement text: ‘Board comments on fine levied by the Exchange’.
For remittance, the BSE designated a specific Virtual Bank Account with ICICI Bank (IFSC Code: ICIC0000104) dedicated solely to SOP fines and waiver fees.
Source: BSE
