No auction, govt has to sell HPL shares to TCG at valuation: TCG

A day after West Bengal said it will conduct an auction to assess the value of its shares in Haldia Petrochemicals prior to offering them to The Chatterjee Group, a senior company official has said this is out of the question and the shares must be sold to TCG "at valuation".

"When the government has to sell its shares, it has to sell to TCG at valuation and it cannot say it can go for an auction," TCG (Chatterjee Group) President Aniruddha Lahiri told PTI when contacted for the group's comment on the government's stance.

While TCG Chairman Purnendu Chatterjee could not be reached for comment as he was abroad, Lahiri said, "TCG has not succeeded in the courts of law on the ground that its petitions were not maintainable under Sections 397/398 of the Companies Act and all agreements prior to the litigation are valid and subsisting."

Meanwhile, a legal opinion by former Chief Justice of India V N Khare has asserted that the transfer of 155 million shares of the West Bengal government to TCG is a "concluded contract".

HPL had sought legal advice from Khare on the status of all agreements reached between the two promoters, the West Bengal government and TCG following the Supreme Court judgement in favour of the state's right to hold on to the shares in September.

Lahiri said HPL would have to register the shares in favour of TCG in the company's books of accounts and also to sell the shares held by WBIDC (a government agency) to TCG.

HPL was forced to take a legal opinion on the issue as it was under pressure from its lenders, the sources said.

When a corporate debt restructuring (CDR) package for the ailing company was cleared, a provision for conversion of its Rs 128 crore bank loan into equity existed.

The sources said since this has not taken place yet, the banks had asked the company to seek a legal opinion on all the agreements which the company had signed with its lenders.

The legal opinion has been circulated among all the board members of the company, according to the sources.

"A high-level committee has been formed and a decision will be taken soon," the sources said.The West Bengal government has been locked in a battle with TCG for control of HPL since 2006. Most recently, the Supreme Court dismissed a petition filed by The Chatterjee Group (TCG) against the decision of the Calcutta High Court allowing the West Bengal government to retain 155 million shares in Haldia Petrochemicals Ltd.

Purnendu Chatterjee-led TCG had approached the Supreme Court after the High Court set aside a 2007 order of the company Law Board (CLB) directing the state government to exit from HPL by selling its stake to its joint venture partner, TCG.