TCG wants to settle Bengal row

The Chatterjee Group (TCG) is ready for an amicable settlement of its dispute with the West Bengal government over shareholding and management of Haldia Petrochemicals (HPL).

TCG President A Lahiri said the group wanted to work with the state government in Haldia Petrochemicals, as both were co-promoters of the company. "We want to continue talks with the state government. We know that to make HPL a successful outfit, both the promoters have to cooperate with each other," he said.

TCG's plea for a truce with the state government came two days after the Company Law Board (CLB) directed the West Bengal government to transfer its shares in HPL to TCG in two tranches. Industry Minister Nirupam Sen indicated that the state government at present was not keen on discussion with TCG.

"We wanted to discuss the issue with them earlier, but they went to court," he added.

Sen also made it clear that the state government would not take any decision regarding transferring 15.5 crore shares of West Bengal Industrial Development Corporation (WBIDC) as mandated by the CLB to TCG for Rs 125 crore before taking any legal opinion. "We shall take legal opinion for that," he added. Earlier, Lahiri said the CLB order clearly favoured the state government, but TCG was willing to abide by it.

"The CLB order does not help TCG in any way. First, TCG wanted the shares issued to IndianOil should be cancelled, but the issue has been upheld," he pointed out. "Second, the order directs TCG to purchase the second tranche of government shares at Rs 28.80 (a share) or at a price determined by the valuer, and this was what the government wanted," he added.

"Finally, under the shareholders' agreement, TCG could pay for the first tranche of 15.5 crore shares valued at Rs 10 in instalments, but now the group has to make a one-time payment of Rs 125 crore," he said. Lahiri pointed out that February 20 was the key date in the HPL matter.

"The parties in the case have to appear before the CLB on February 20 and the final decision about the pricing of 52 crore shares held by WBIDC will be taken that day. Besides, TCG would also come to know on that day whether the state government will transfer 15.5 crore shares to TCG at Rs 10," he added.

Transfer of 15.5 crore shares to TCG at Rs 10, as directed by the CLB, will ensure that the group's holding goes up beyond 51 per cent in HPL. The deadline for the transfer is February 28.

This is expected to lead to a change of management at HPL, as a government team had moved into HPL and ousted TCG nominees from the management when the dispute had broken out between the two partners.

On February 1, Nirupam Sen indicated that the state was ready to exit HPL in favour of TCG, as directed by the CLB, but wanted to appoint the valuer of its stake itself. "We have no objection in divesting our shares (in HPL)," Sen said.In his first reaction to the CLB order on January 31, Sen had said that the order was "unacceptable" to the state government and it would move the court against it.

Sen said the government had reservations over the order on appointment of valuer. "We want to appoint the valuer ourselves. We are taking legal opinion on it," he said, adding the government wanted the shares to be divested in a single lot and not in parts.

On January 31, CLB ordered WBIDC to exit the company by selling its shares to TCG.

The order has, however, upheld the issue of shares by the state government to Indian Oil Corporation. The CLB asked WBIDC to transfer 155 million shares to TCG at Rs 10 a share agreed upon earlier by the two promoters and another lot of 520 million shares at Rs 28.80 or a price determined by an independent valuer.

The CLB has set a deadline of February 28 for TCG to purchase the 155 million shares and 45 days from the date, at which the valuer fixes the price, to buy the balance 520 million shares. If TCG fails to buy those shares within the timeframe, WBIDC will buy the shares of TCG.

Following the stake transfer, TCG would hold 52 per cent (76 crore shares) of the stake in HPL, which has a paid-up equity capital of Rs 1,460 crore (146 crore shares of Rs 10 each).

TCG holds its stake in HPL mainly through Chatterjee Petroleum (Mauritius) and India Trade (Mauritius). The 155 million shares were earlier issued to Chatterjee Petroleum India (CPIL), but were not confirmed.