WB power regulator seeks details from CESC on demerger

WBERC, the state power regulator, has sought details from RP Sanjiv Goenka's flagship company CESC Ltd on the demerger of Spencer's and other non-power businesses from the company, an official said.

"We had sent two letters to CESC. First, asking them to update the commission about the demerger based on media reports and letters received from public," West Bengal Electricity Regulatory Commission (WBERC) chairman R N Sen told PTI on Monday.

The second letter has asked CESC to submit an affidavit with the commission that those companies which are being carved out have not received any "benefit" from CESC since inception till seperation, he said.

According to the announced scheme, the demerger of non-power businesses of CESC and its subsidiaries have been transferred to two new entities - RP-SG Retail Ltd and RP-SG Business Process Services Ltd. CESC will retain only the power business.

CESC had gone ahead with partial demerger seeking nod from the Kolkata bench of National Company Law Tribunal (NCLT) after the commission was not entirely convinced to allow power purchase agreement (PPA) approved for the proposed generation and distribution companies from the complete scheme of arrangement of demerger.

Sen, who retired on Monday, said that if the seperated entities had benefitted from CESC, then there would be a need for valuation exercise and the same is supposed to be accounted for -- for the sake of consumers.

"We had received petition for power purchase agreement but unless the company splits, the question of approval of the petition (for PPA) does not arise. First, they have to take the commission's approval for the demerger, Sen had said.

Sen had also said earlier that the NCLT's nod does not qualify for "automatic approval" from WBERC.

CESC has indicated ongoing dialouge with global investors in Spencer's Retail but it could not be immediately acertained how far the regulator's queries will imopact such negotiations.

CESC could not be reached for comment.

Sources in the WBERC said the stance of the commission could ease after Sen's three-year tenture ended.