Bengal Govt opposes CLB recommendation to resolve Haldia issue

14-Mar-06

The Company Law Board (CLB), in an attempt to resolve the tussle between The Chatterjee Group (TCG) and the West Bengal government, has recommended that TCG be allowed to retain the largest holding in HPL. Among the basic tenets of the formula, the CLB is understood to have proposed that all agreements between TCG and the WBIDC relating to transfer of shares should stand cancelled. Besides, whatever part-payment has been received by WBIDC from TCG should be refunded. The West Bengal government has strongly opposed this recommendation on two grounds - The government does not favour TCG becoming the majority shareholder of HPL and it is not agreeable to the idea of the acquisition of additional stake by Purnendu Chatterjee in HPL to become a majority shareholder at a miniscule price of Rs 395 crore. The next CLB hearing is slated for March 29. At present. HPL's Rs 1,409 crore paid-up capital is split as follows: WBIDC 47.88% and Chatterjee Petrochem (Mauritius) 30.70%. TCG associates, including India Trade (Mauritius), Winstar and others hold a further 18.24%. This does not include the proposed allotment of 7.5% stake to Indian Oil Corporation (IOC), which, if it happens, will reduce the shareholding of TCG and its associates to 44.23% from 48.94%. Despite the CLB order on March 9, asking HPL to defer its March 13 board meeting, (since the two promoters and IOC were fighting over the ownership issue in court), the meeting was held as the company claims that all the directors had been informed earlier about it.