Supreme Court permits TCG to move ICC International Court of Arbitration to settle HPL shareholding dispute

11-Dec-13

A Division Bench of the Supreme Court has permitted The Chatterjee Group (TCG) to move the ICC International Court of Arbitration (ICA) in Paris to settle a dispute over the ownership of 15.5 crore shares of Haldia Petrochem, totaling to around 9% of equity capital. The court in its verdict has said International Court of Arbitration is the right forum to decide on the disputed shares. TCG, led by Purnendu Chatterjee, is the single largest stakeholder in HPL with around 41% stake. The West Bengal government holds nearly 40% holding (including the controversial 9%). A Supreme Court order may impact the State Government’s move to disinvest its 40% interest to Indian Oil Corp Ltd (IOC) at around Rs 1,700 crore (Rs 25.10 per share). IOC already holds around 9% stake in the company. IOC has been selected as valid bidder by government which is in a hurry to divest its stake in the entity. But the disputed 155 mln shares are part of 40% stake put on sale. HPL chairman and state industries minister Partha Chatterjee told Business Standard that he would seek legal opinion to take next step. “We will have to wait and decide since the verdict comes from the apex court,” he said. When contacted IOC did not comment on the matter. TCG is involved in a protracted legal battle with the West Bengal government, another major promoter, for these 155 million shares. The 9% disputed share is key to management control in HPL. TCG, which has close to 41% stake would gain management control if disputed shares go in favour of TCG's Purnendu Chatterjee. On the other hand, IOC, which already has close to 9% stake in HPL, would be reaching close to the magic figure of 50% and leading to management control.