Her son's petrol pump ended her board seat.
Written on 14 October 2026, based on public reports at that time.
On 15 August, Indian Oil got a new independent director.
On 18 September, she resigned.
Her son has run an Indian Oil petrol pump in Udaipur since 2020. In her letter she wrote that he runs it on his own and she has no role in it. She left anyway. She had checked the independence rules herself and found them breached.
The rule most people miss
Your relatives’ dealings with the company count, not just your own. Under SEBI’s listing rules, if a relative does business with the company above Rs. 50 lakh, or 2% of its turnover, whichever is lower, you stop being independent. The look back is the current year plus three years before it.
Rs. 50 lakh. A busy petrol pump can buy more fuel than that in a single month.
How it slips through
The director signs a declaration saying she meets every test. The board is supposed to check it. Most boards take it on record and move on. Very few match a director’s family against the dealer, vendor or customer list.
Here the check came 34 days in, and it came from the director herself.
She did the right thing. Now think about the version where nobody checks. Committee approvals and related party sign offs can all be questioned later. One dealership agreement is enough to start that argument.
In family businesses I see a smaller version all the time. The independent director’s brother-in-law supplies packaging. Nobody hid anything. Nobody asked.
What to do before your next meeting
If you sit on a board, ask for the list of dealers, distributors, vendors and large customers. Run your relatives’ names against it. Tell the board in writing what you find.
If you appoint independent directors, ask for that relative list before the appointment letter goes out, and match it against the vendor master every year.
A declaration of independence is only as good as the last time someone checked it.
Background
Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 sets out who qualifies as an independent director of a listed entity. Sub-clause (v) applies the test to the director’s relatives: none of them may hold securities above a threshold, be indebted to the entity, have guaranteed a third party’s debt to it, or have any other pecuniary transaction or relationship with the listed entity, its holding, subsidiary or associate company. The proviso caps such transactions at 2% of the entity’s gross turnover or total income, or Rs. 50 lakh, whichever is lower. The period examined is the current financial year and the three financial years immediately preceding it. “Relative” takes its meaning from section 2(77) of the Companies Act, 2013, which covers the spouse, parents, children and their spouses, and siblings, including step relations. Under Regulation 25(8), every independent director must declare at the first board meeting after appointment, and annually, that these conditions are met.
Source: SEBI (LODR) Regulations, 2015, Reg. 16(1)(b)(v) and Reg. 25(8) link
Has your board ever matched its directors' families against the vendor list?
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