The West Bengal government has called for a board meeting on October 1 of Haldia Petrochemicals Ltd (HPL) to discuss a number of pending and litigious matters that have been deferred for over two years because of the long drawn legal battle between the partners. This two year long battle was first fought before the Company Law Board (CLB) in Delhi and then at Calcutta High Court. The Bengal government has now raised the ante against The Chatterjee Group (TCG) after winning the critical legal battle for control over HPL in Calcutta High Court. The board intends to discuss the issue of share allotment to the financial institutions led by IDBI, a controversial subject between the two partners, on which the court ruled in favour of the state government. The meeting will also finalise the accounts for the last three years and set the date for the meeting of the annual general meeting. HPL hasn't held a shareholders' meeting since TCG moved the CLB in August 2005 to contest the allotment of shares to the Indian Oil Corporation (IOC). However, this may e scenario may get totally transformed if TCG get a stay on Calcutta High Court's order from the Supreme Court. Anticipating the possible TCG move, the state government filed a caveat before the Supreme Court on Saturday to ensure that TCG did not secure an ex-parte stay order on the high court's judgment.
If the board meeting is held as scheduled, the state government will be able to drive forward all the proposals with the support of the financial institutions which are keen to pick up a small stake in HPL. The corporate debt restructuring package, which was approved by the lenders in January 2004 and took HPL out of near bankruptcy, had called for the conversion of loans worth Rs 127 crore into equity, as well as the proposed induction of the IOC.
The state government, which enjoys the support of the majority of the directors, has publicly expressed a desire to turn HPL into a professionally run company. Both TCG and the government have 4 members each on the 16 member board, which also has representatives from the financial institutions and independent directors. The Bengal government holds a 51.67% stake in the state's second-largest company which registered gross sales of Rs 8,300 crore last year and earned a profit of Rs 530 crore. The IOC and Tata Sons own 8.19% and 2.46% in the company respectively while TCG holds a 37.68%.