State Bank of India, Indian Oil Corp. ask for a place on the board of Haldia Petrochemicals Ltd

27-Feb-12

State Bank of India and Indian Oil Corporation Ltd have asked for a place on the board of Haldia Petrochemicals Ltd (HPL), seeking a larger say in the project, as per The Telegraph. IOC has around 9.6 per cent stake in HPL, while the SBI is the leader of the lenders’ consortium for a working capital loan of more than Rs 1,000 crore. was eligible for a board membership when it invested Rs 150 crore equity in HPL in 2004. However, the legal battle between TCG and the West Bengal Industrial Development Corporation led to a court decision to freeze any change in the composition of the board denied Indian Oil a berth. In September 2011, a Supreme Court judgment removed barriers on the appointment of directors. Since then, SBI and IOC have written to the company demanding board berths- IOC has nominated its director (finance) Pravin K. Goyal. State Bank is yet to name its nominee. IOC’s plan to acquire a strategic stake of at least 26% in HPL was thwarted by opposition of private promoter The Chatterjee Group. After Septembers’ verdict by the Supreme Court, which turned down TCG’s demand for a majority stake, IOC revived its interest following the Bengal government’s decision to auction its shares. At present, the HPL board has 14 members. Apart from the three nominees of the Bengal government, there are four from TCG, five from financial institutions, one independent director (Jamshyd Godrej) and managing director Partha Bhattacharyya.The company has no permanent chairman now. After Tarun Das stepped down in May, TCG head Purnendu Chatterjee has been officiating as the chairman. All the applications for the new board positions are likely to be discussed at the next board meeting, to be scheduled in March.