 "Law Ministry's views sought on Hindustan Zinc,BALCO share sale")
Majority stakes in both these companies were sold to Vedanta group during 2001-2003 and now the government has a residual stake of 29.5 per cent stake in Hindustan Zinc and 49 per cent stake in Bharat Aluminium Company (BALCO).
"The Law Ministry has been asked to provide its opinion as there are lots of complex issues in selling remaining stakes in both the firms (Hindustan Zinc and BALCO).
"The issues include taking approval from Parliament for the stake sale, particularly for Hindustan Zinc as it was formed through a statute," a source close to the development said.
Selling remaining government stake in Hindustan Zinc requires Parliament approval as it was incorporated in January, 1966 as a public sector company, after the erstwhile Metal Corporation of India Ltd was nationalised.
The Law Ministry had pointed out earlier that a Supreme Court order of 2003 had stayed disinvestment of HPCL and BPCL, saying they were formed through a statute and required Parliament approval and same is applicable on Hindustan Zinc also.
He added that Law Ministry's views have also been sought on other issues like selling shares through auction route and Vedanta's first right of refusal.
Besides, the government has more or less zeroed in on offer for sale (auction) route as the preferred method of the share sale for the two companies to fetch the best price, the source said, adding that this also needs to be vetted by the Law Ministry.
Refusing to give a timeline for selling the remaining stake in both the firms, the source said that it could happen "some time next fiscal even if things are hurried up as lot of procedures needs to be followed".
In January 2012, Vedanta Resources had offered Rs 17,275 crore for buying out the remaining stake of the government in Hindustan Zinc and BALCO.
The company Board had also taken shareholders approval in August last year to sweeten the offer by up to 25 per cent to Rs 21,635 crore.
"The government is not in any hurry for selling its remaining stakes in the two firms", the source said, while noting that disinvestment target of Rs 30,000 crore for the current fiscal is unlikely to be missed by a big amount.
Besides, government is expecting to meet more than 50 per cent of the next year's target of Rs 40,000 crore through stake sale in Coal India alone and is in "comfortable situation on the disinvestment front".
He added that after the Law Ministry's opinion, steps will be taken to appoint a consultant for valuation of BALCO.