Tug-of-war

Calcutta, Feb. 16: Calcutta High Court today stayed the Company Law Board order of January 31 in the Haldia Petrochemicals case.

Hearing a petition filed by the West Bengal Industrial Development Corporation and the state government against the CLB order, Justice Jayanta Biswas asked both the petitioners and respondents (The Chatterjee Group) to “maintain a status quo as existing on the day the order was passed (January 31) till the disposal of the hearing or a further order is passed.”

The Company Law Board had directed the Bengal government to sell its stake in Haldia Petrochemicals to TCG and exit the business. But TCG would 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 had 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 would have to be paid on or before February 28. This would take TCG’s share in Haldia Petro to 52 per cent and it would be allowed to take over the day-to-day management of the company.

“The transfer of 155 million shares would have given TCG a controlling stake in Haldia Petrochemicals. But after the interim stay on the CLB order, TCG will not be able to control the day-to-day affairs of HPL till the hearing is over and a judgment is made,” said Rajiv Ginodia of R. Ginodia & Company, the WBIDC and state government’s counsel.

According to Ginodia, TCG will have to establish its right over the 155 million shares, which is the bone of contention.

WBIDC and the state government see today’s high court order as a first-round victory for them.

In its order, the CLB had also fixed February 20 as the date for hearing whether the state wanted to appoint an independent valuer or would sell its 520 million shares in HPL to TCG at Rs 28.80 a share. TCG would have to pay Rs 1,560 crore within 60 days if the state government didn’t want a fresh valuation of HPL shares.

“However, the CLB hearing on February 20 now has no meaning with the main order being set aside by the high court,” said a TCG lawyer.

The case will be heard on the merits of the appeals setting aside the CLB order, said Justice Biswas.