Haldia Petro, WB want TCG petition nullified

Haldia Petrochemicals (HPL) and the West Bengal (WB) government have sought dismissal of the Chatterjee Group's (TCG) petition in their counter affidavit filed before the Company Law Board (CLB).

In the affidavit related to the case on the issue of Rs 150 crore equity to Indian Oil Corporation (IOC), it has been stated that TCG had suppressed vital facts relating to the board meeting held on 11 October, 2004, where it had been a party to the unanimous decision to induct the oil PSU.

One fallout of the legal wrangle was the continuing interest loss of 1.75 per cent on the company's existing debt. On August 10, IDBI decided that refinancing of existing debt be kept on hold till the matter was resolved. It asked the company to pay interest at 10.5 per cent instead of 8.75 per cent, effective from 1 July.

The affidavit said on July 27, 2005, the WB government wrote to the Chatterjees stating that despite discussions on disinvestment of its shares to TCG since January 2005, the negotiations did not conclude.

Accordingly, HPL decided to defer the government's proposal to disinvest and remain a shareholder.

The affidavit further notes that TCG was itself a party to the decision on the fresh issue of shares to IOC and had voted for the allotment of 150 million shares at Rs 10 each in the resolution passed in the extraordinary general meeting in January 2005.

The legal validity of issue of shares to the public sector oil major will be determined by the CLB.