Legal setback to TCG as Court dismisses transfer of HPL shares

Calcutta High Court has dismissed the Company Law Board (CLB) order that instructed the West Bengal government to transfer 155 million shares of Haldia Petrochemical Ltd. (HPL) to its joint venture partner TCG and exit the company - This is a legal setback to the Purnendu Chatterjee-led The Chatterjee Group (TCG). The Court has reversed the order of CLB passed on January 21, 2007 and allowed the appeals of the West Bengal government and West Bengal Industrial Development Corporation (WBIDC) in respect of the litigation over Haldia Petrochemicals Ltd. In yet another setback, the court also upheld the entry of Indian Oil Corporation (IOC)'s into HPL, a move opposed by TCG. The starting point of TCG's dispute with the state government was the handing over of a 7.5% equity stake in HPL to IOC, in 2005 after TCG alleged 'breach of trust and confidence', which, as viewed by TCG, would result in pushing the group into a minority holding in HPL. TCG then moved the CLB, and also ruled out any out-of-court settlement. The State Government and WBIDC had appealed the High Court against the CLB order that called for transfer of 155 mln shares to TCG. The court has dismissed the appeals filed by Purnendu Chatterjee and his supporting parties as well as rejected the objections filed by them against the state government's appeals. The Court has refused a prayer by TCG counsels to stay his order for two weeks for the company to appeal against the order before a higher bench.
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