 "SC rejects Bengal's appeal to restrict TCG from approaching Paris court")
The Haldia Petrochemicals Ltd (HPL) story is back to square one. The Supreme Court of India today rejected West Bengal government's appeal to restrain HPL's private promoter TCG to approach the international court of arbitration in Paris regarding a dispute over 155 million shares or close to 9% stake in the company.
The latest order from the apex court comes as a big blow to the HPL stake sale process being led by state government which holds close to 40% stake in eastern India's biggest petrochemical company.
PSU major IOC (Indian Oil Corp) has been selected as valid bidder by government which is in a hurry to divest its stake in the entity. But the disputed 155 million shares are part of 40% stake put on sale.
HPL chairman and state industries minister Partha Chatterjee told Business Standard that he would seek legal opinion to take next step. “We will have to wait and decide since the verdict comes from the apex court,” he said. When contacted IOC did not comment on the matter.
TCG is involved in a protracted legal battle with the West Bengal government, another major promoter, for these 155 million shares. The 9% disputed share is key to management control in HPL. TCG, which has close to 41% stake would gain management control if disputed shares go in favour of TCG's Purnendu Chatterjee. On the other hand, IOC, which already has close to 9% stake in HPL, would be reaching close to the magic figure of 50% and leading to management control
A Source in IOC once again reiterated that PSU major's intent to acquire full stake remains intact. “We submitted bid for 40%. WBIDC has to look into it to arrive at a solution,” the person said.
HPL's principal promoters-the Bengal government and Purnendu Chatterjee-led TCG -have been engaged in a legal tussle for almost eight years now. At the crux of the battle is ownership and management control of the company.
At one point in time during 2005, it was decided that government would divest its stake to TCG. The later had paid the first installment as well but then state government stopped accepting cheques from TCG, resulting into a legal battle.
Then TCG had initiated proceedings before the CLB against the West Bengal government and West Bengal Industrial Development Corp (WBIDC) to gain controlling shareholding and management control of HPL.
Though the CLB had passed an order in favour of TCG, the state and WBIDC appealed before the high court, which had set aside the CLB order in September 2007.
While the stake sale is in for uncertain delay, the financial health of the company continues to be ill. The lenders have tightened their purse strings owing to the legal battles and inordinate delays due to fight between the two key promoters.
The latest order from the apex court comes as a big blow to the HPL stake sale process being led by state government which holds close to 40% stake in eastern India's biggest petrochemical company.
PSU major IOC (Indian Oil Corp) has been selected as valid bidder by government which is in a hurry to divest its stake in the entity. But the disputed 155 million shares are part of 40% stake put on sale.
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The court in its verdict has said International Court of Arbitration is the right forum to decide on the disputed shares, said one of the legal expert appearing for WBIDC by adding that it was certainly a set back and future remains uncertain now.
HPL chairman and state industries minister Partha Chatterjee told Business Standard that he would seek legal opinion to take next step. “We will have to wait and decide since the verdict comes from the apex court,” he said. When contacted IOC did not comment on the matter.
TCG is involved in a protracted legal battle with the West Bengal government, another major promoter, for these 155 million shares. The 9% disputed share is key to management control in HPL. TCG, which has close to 41% stake would gain management control if disputed shares go in favour of TCG's Purnendu Chatterjee. On the other hand, IOC, which already has close to 9% stake in HPL, would be reaching close to the magic figure of 50% and leading to management control
A Source in IOC once again reiterated that PSU major's intent to acquire full stake remains intact. “We submitted bid for 40%. WBIDC has to look into it to arrive at a solution,” the person said.
HPL's principal promoters-the Bengal government and Purnendu Chatterjee-led TCG -have been engaged in a legal tussle for almost eight years now. At the crux of the battle is ownership and management control of the company.
At one point in time during 2005, it was decided that government would divest its stake to TCG. The later had paid the first installment as well but then state government stopped accepting cheques from TCG, resulting into a legal battle.
Then TCG had initiated proceedings before the CLB against the West Bengal government and West Bengal Industrial Development Corp (WBIDC) to gain controlling shareholding and management control of HPL.
Though the CLB had passed an order in favour of TCG, the state and WBIDC appealed before the high court, which had set aside the CLB order in September 2007.
While the stake sale is in for uncertain delay, the financial health of the company continues to be ill. The lenders have tightened their purse strings owing to the legal battles and inordinate delays due to fight between the two key promoters.