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Haldia double-edged order
Mixed bag
Bengal told to sell its stake in Haldia Petro to Purnendu
Allotment of 7.5% shares to IOC upheld. Purnendu had opposed this

New Delhi, Jan. 31: Round One of the Haldia Petrochemicals battle has given Purnendu Chatterjee a chance to get what he wants — but at a price and after a punch.

The company law board has directed the Bengal government to sell its stake in Haldia Petrochemicals to Chatterjee’s TCG and exit the business. But TCG will have to pay a price equal to or higher than that set by the government earlier for the same stake in an aborted deal.

The order also confirmed the transfer of 155 million shares by the WBIDC to TCG at Rs 10 per share, for which the balance amount of Rs 125 crore will have to be paid on or before February 28. This will take TCG’s share in Haldia Petro to 52 per cent and it will be allowed to take over the day-to-day management of the company.

This means that in exchange of management control, TCG will have to stump up within 28 days Rs 125 crore, which under normal circumstances the company could have paid over a period of time.

The company law board also approved the allotment of 7.5 per cent shares to Indian Oil Corporation, which TCG had opposed on the ground that it was a surreptitious takeover move.

The ruling asking the state to sell its stake to TCG is a setback for the government but the vexed issue does not appear to have been resolved yet. The possibility of an appeal in the high court — and the Supreme Court later — cannot be ruled out.

Although the state government has not taken a decision pending receipt of the order from the law board, indications are that it would prefer to exercise its right of appeal in Calcutta High Court if the fine print throws up surprises.

With today’s ruling, the contentious issue has come full circle — in 2005, the state government had given Chatterjee the option to acquire 36.87 per cent shares. A take-it-or-leave-it offer was also made in 2006.

According to the CLB directive, the 520 million shares owned by the WBIDC will have to be sold to TCG at a price determined by an independent valuer or at the earlier offer price of Rs 28.80 a share, whichever is higher.

The amount will have to be paid within 45 days of the date of report of valuation or within 60 days if the state government informs the board that it does not want a fresh valuation. If the deadline is not met, the WBIDC will have the option to purchase the shares held by the petitioners (TCG).

In 2005, the government had waited for Chatterjee to furnish the amount for the stake, Rs 1,560 crore, but he did not do so for months. Eventually, citing TCG’s “dilly-dallying”, the government called off the deal three days before the payment deadline.

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