IRCON fined for missing directors only the government can appoint

Companies No. 85 20 October 2026 · 2 min read · By Pranami Hayaran

For 9 quarters from June 2024, NSE and BSE fined IRCON International ₹1.67 crore between them. IRCON, a government company under the Railways Ministry, was short of independent directors, the outsiders meant to look out for small shareholders. Half its board was not independent, and 2 committees were short too: the audit committee, which checks the accounts, and the one that picks and pays directors.

But IRCON cannot fix this itself. The Railways Ministry picks every IRCON director, and IRCON says it kept asking. The ministry named 1 new independent director, a former mayor of Faridabad, who joined on 17 August 2026. IRCON rebuilt both committees that day, qualifying for a waiver, and on 19 October 2026 said NSE had waived the committee fines for 8 quarters, December 2024 to September 2026.

That is the smaller part of the bill. SEBI fines ₹5,000 a day for a short board and ₹2,000 a day for each short committee. IRCON's fine for April to June 2026, ₹9,66,420 from each exchange, is exactly 91 days at ₹9,000 plus GST. NSE dropped the committees' ₹4,000 a day. The board's ₹5,000, charged in all 9 quarters, stays, and IRCON has disclosed no waiver from BSE.

The rules allow more: after 2 full quarters with a short board or audit committee, a stock can be put on restricted trading and then suspended, unless the exchanges write down why not. IRCON's notices mention only fines, which it lists as a contingent liability, a possible cost noted in its accounts but not booked as an expense. So a rule meant to protect small shareholders fines a company for seats only its owner can fill.

Bars for 9 quarters from June 2024 to June 2026, each between ₹5.37 lakh and ₹14.04 lakh, the highest in March 2025 and about ₹9.6 to ₹9.8 lakh in each of the last 4.

A bar of ₹9,000 a day split into ₹5,000 for the board, not waived, and ₹2,000 each for the audit committee and the nomination and pay committee, both waived.

A timeline from June 2024, when the exchanges first fined IRCON for its board, through bigger fines in December 2024 and March 2025, to the ministry's director joining in August 2026 and NSE's waiver in October 2026.

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