HC dismisses PIL against govt stake sale in APPML

The Andhra Pradesh High court has dismissed a public interest litigation(PIL) petition filed against the state government's selling of its 25 per cent share holding in Andhra Pradesh Paper Mills Limited (APPML). The PIL had alleged that the government had not obtained the best price.

The state government under its disinvestment programme has sold the shares to the Digvijay Investments Limited(DIL), a co-promoter of AP Paper Mills for Rs 130.95 per share realising Rs 29.25 crore in last December.

According to a press release from the state government, the petitioner, was allegedly acting as a front for a Kolkata-based brokering firm. The petitioner had alleged that the government had sold its shares to the co-promoter even though it had been offered a much higher price by another party.

Welcoming the courts decision, D K Panwar, chairman of the Implementation Secretariat, Public Enterprises department of Andhra Pradesh government, said that the decision had sent a clear signal that the courts will not entertain unfounded allegations made by a meddler, with no apparent involvement in a sale process, most likely acting as a front or a proxy for others.

"When the state government began the disinvestment strategy for its shareholding in July,2003, the share price was only Rs 40. So the price achieved in the sale was over three times this level," he said in the press release.

The Rs 130.95 share price matched an independent valuation estimate prepared by professional valuers and is 61 per cent above the current market price of about Rs 81.50," he said in the press release.

"The government has clearly demonstrated that it acted fairly and reasonably, having taken expert legal and financial advice on the obligations in the promoter's agreement. The government was advised that the prudent course was to first offer the shares to DIL. In this way the optimum price with the certainty of payment, minimum legal uncertainty and the avoidance of after-sales complications was achieved," the press release added.