The government has directed Hindustan Petroleum to acknowledge ONGC as a promoter in regulatory filings in a move aimed at ending the year-long slugfest between the two companies that has obstructed synergy gains from the Rs 37,000-crore acquisition deal, according to sources familiar with the matter.
HPCL management has repeatedly blocked ONGC’s attempts to assert its authority: ONGC chief can’t chair HPCL board, as he does in case of other subsidiaries, or intervene in the matters of HPCL. The cold relations between the two firms has also pushed HPCL-MRPL merger plans to the backburner, according to sources.
In public filings of its shareholding pattern, HPCL identifies the President of India with zero stake as the promoter and ONGC with 51.11% stake as a public shareholder. By being classified as a public shareholder, not promoter, ONGC risks losing the regulatory exemption from making an open offer to other shareholders of HPCL as part of the deal, sources said. An open offer for an additional 26% stake in HPCL at the deal price could cost ONGC about Rs 19,000 crore.