A three-day hearing by an arbitration panel of retired Supreme Court judges ended inconclusively on Tuesday, on the sale of residual government stake in Bharat Aluminium Company (Balco).
The panel will now sit in mid-April for hearing more arguments from the government side and from Sterlite Industries, that currently has 51 per cent in Balco.
“The arbitration will continue,” said a person familiar with the development. This rules out chances of early settlement of the long-pending issue, despite the government attentively looking at disinvestment in public sector companies for meeting its rising money needs.
Former Union law minister Shanti Bhushan is representing Sterlite Industries and senior counsel A K Ganguli is representing the government’s case at the hearing.
Sterlite, a subsidiary of London-listed Vedanta, bought 51 per cent of Balco in March 2001 for Rs 552 crore, when the National Democratic Alliance government decided to divest the government’s stake in the public sector company. Sterlite had the right to buy the remaining stake after a three-year period, but ran into differences with the government over valuation.
After the embargo expired in March 2004, Sterlite sent the government a call notice and a cheque of Rs 1,099 crore for Balco’s residual stake, in accordance with the shareholders’ agreement.
But, differences in the value of the government’s residual stake came up after the United Progressive Alliance came to power in May 2004 and the issue was referred to the Attorney General, who termed the call option invalid under Section 111A of the Companies Act. He said, however, that the residual stake could be sold at the market price.
In 2006, Sterlite moved the Delhi High Court for interim relief, to ensure the government did not sell the stake to anyone else. s