Chatterjee: Selloff mode
Calcutta, Oct. 18: The Bengal government today formally kicked off the process of offloading its stake in beleaguered Haldia Petrochemicals through an open auction even as existing private sector partner The Chatterjee Group cautioned that the process would tread a legal minefield.
The commerce and industry department notified the sale of West Bengal Industrial Development Corporation’s (WBIDC) 39.99 per cent stake in HPL while upholding the first right of refusal for TCG.
“Once the board of the WBIDC also formally approves the sale, it will appoint a transaction analyst to prepare the tender document for the auction. The highest price discovered through the auction will be offered to TCG. If they agree to pay the same price, the shares will be offered to them. Else, we will sell to the highest bidder,” Partha Chatterjee, industries minister of Bengal, said.
The Telegraph had first reported the state government’s decision to sell its share through an auction on December 6 last year.
The government notification followed a report by the group of ministers (GoM), which upheld the opinion of Partha Chatterjee after the Supreme Court declined to give TCG the management control of HPL.
However, TCG disputed the method of arriving at the value of the share through an open auction.
“The articles of association of the company said both the WBIDC and TCG must sell shares to each other at a value decided by a valuer. In case, either of us are unwilling to buy at the price determined by the valuer, the shares can be sold to a third party,” a TCG official said.
But a section of the government officials contested the claim. “This process will be followed if only TCG or the Tatas, the original two promoters along with the WBIDC, want to sell their shares. There is no such restriction if the WBIDC wants to sell its share. It can find value in any manner it wants,” the official said.
The TCG official also pointed to an order issued by Justice Indra Prasanna Mukerji in Calcutta High Court yesterday in a case pertaining to the International Court of Arbitration, Paris. TCG wanted to move arbitration against the WBIDC over the majority ownership in HPL, but the company contested the claim.
“Justice Mukerji said HPL cannot take any action until the hearing on the matter is concluded without reference to this court,” the TCG official said.
He argued that even as there was no restriction on the WBIDC to hold an auction, HPL could not transfer WBIDC’s share to the highest bidder or register the same in the bidder’s name.
The development comes at a time HPL is going through the worst phase of its existence, suffering a loss over Rs 2 crore on a daily basis because of a glut in the petrochemical market and a huge debt burden.
Partha Chatterjee held a meeting with top Changi officials today. Changi is a strategic investor in airport city project Bengal Aerotropolis in Andal, Burdwan.
“They (Changi) wanted to know what is delaying the project since they want prompt completion. We told them that clearances from the Union ministry of defence and Coal India Limited are yet to be received. Besides there are issues with registration and sanction of the master plan, which will have to be done,” he said.
“We will hold a high level meeting after Puja, by November 15, to facilitate these things. Chief secretary Sanjay Mitra and home secretary Basudeb Banerjee would also attend the meeting,” he added.