Indian Oil asks HPL to take Nayyar on board

Indian Oil Corporation (IOC) has asked Haldia Petrochemicals (HPL) to appoint Naresh K Nayyar, director (business development), as a director on its board.

This follows HPL's 150 million equity shares being credited to Indian Oil account.

IOC had nominated Nayyar on the HPL board in April but the appointment could not become effective since IOC's cheque for the purchase of 9 per cent equity in HPL met with reservations from co-promoter, The Chatterjee Group (TCG).

Senior officials told Business Standard, IOC has asked HPL to enlist their nominee on their board.

"This can be done only in the next board meeting of the company which has not been scheduled so far," said an official.

IOC had given a cheque for Rs 150 crore for the purchase of 150 million shares of the company as fully paid at par in February but it was encashed only on August 3 following which the shares were transferred to IOC account.

TCG's Chatterjee Petrochem (Mauritius) Co had filed a petition with the Company Law Board alleging that the West Bengal government has violated the agreement concerning off-loading of equity to them. The state-owned West Bengal Industrial Development Corporation owns 38.65 per cent in the group while the Tatas hold another 3 per cent.

TCG had alleged that the state government decision to issue 7.5 per cent equity to Indian Oil for Rs 150 crore and another 6 per cent fresh equity to lenders including IDBI under the debt recovery scheme would dilute its holding in HPL.

It held 58 per cent equity in the company and with the issue of shares to IOC through expansion of the equity base, its share would come down to 53 per cent and would further reduce to about 51 per cent if IDBI is given the shares.