Divestment Plan Of Gail Challenged

Gas Authority of India Ltd had proposed to issue shares to its employees, according to a resolution scheduled to be moved at the AGM on Monday.

But Gujarat Leasing moved a petition before Chief Justice M J Rao of the high court on that day, following which the proposal was dropped, according to counsel.

The case was listed before Justice C M Nayar the next day. Counsel for Gujarat Leasing, Anil Divan and P H Parekh, argued that the public sector company had violated several rules.

The details of the proposed resolution were kept a secret, and the price was not mentioned.

There was no lock-in period and therefore the employees could sell the shares immediately, affecting the price of shares held by others, it was argued.

It was also contended that there was no adequate notice about the meeting and the assurance given to Gujarat Leasing on the listing of shares was violated.

Justice Nayar asked Gas Authority of India Ltd to reply to the allegations in six weeks.