HC orders status quo on HPL stake sale

Move to affect IOC's plan to acquire state govt's 40% stake in HPL

The high court on Thursday ordered a status quo on the sale shares in the Haldia Petrochemicals till December 16. This will spoil Indian Oil Corporation’s plans to acquire the West Bengal government's 40 per cent stake in eastern India's biggest petrochemical company.

However, the order does not clarify whether the status quo is to be maintained over the disputed 155 million shares or the total 675 million shares the state government put on sale. Lawyers representing the state said the order was only on the disputed shares.

The ruling by I P Mukerji was on a petition by The Chatterjee Group (TCG), which opposes the West Bengal government’s sale plan, saying its appeal on its right to go for arbitration at the International Court of Arbitration, Paris, is still pending at the Supreme Court. The apex court is likely to give its verdict by December 16.

Purnendu Chatterjee-led TCG is the key private promoter in HPL and had cautioned the government and bidders about the litigations related to the stake sale. TCG had also come out with an advertisement in a newspaper cautioning the government and interested bidders.

A TCG source said: “We had informed everyone about this angle regarding the stake sale but they did not listen to us. We had informed the group of ministers on HPL as well.” Much depends on the apex court judgment on arbitration. IOC, selected as the lone valid bidder by West Bengal government, has said it would buy all of the 40 per cent stake put on the block. This move, if successful, will give IOC management control of the company.

On the other hand, if the disputed stake goes to TCG, then Purnendu Chatterjee will get management control with about 50 per cent stake. IOC currently has nine per cent stake in HPL. According to sources, IOC also plans to buy financial institutions’ stake in HPL.

In its plea, CBI had stated Ambani was responsible for incorporation of shell companies such as Swan Telecom, Tiger Traders, Zebra Consultants, Parrot Consultants  and Giraffe Consultancy “and their interlocking equity structures”.

Ambani, however, is learnt to have denied the allegation that Swan Telecom was a Reliance Group company.