London-based hedge fund The Children’s Investment Fund Management (TCI) — the largest shareholder after the government in Coal India — has been vocal in its criticism of the state-owned coal major on issues such as the pricing of coal and fuel supply agreements. After an inconclusive meeting with the Ministry of Coal on May 29, TCI, which owns 1.01 per cent in Coal India, said it plans to take the company and its board to Indian courts in July. Oscar Veldhuijzen, partner, TCI, spoke to Sandeep Singh on the demands and the future course of action for the fund:
What emerged out of the meeting with the Ministry of Coal?
A few positives came out as they agreed that Coal India (CIL) is free to set coal prices and committed to coal washing, but that is not enough. We need public commitment.
The ministry did not indicate how they were going to compensate us for the damages caused by interfering in coal prices earlier. We will pursue this through the courts as we have a very strong legal case.
What is the compensation you are asking for? What are your other demands?
I can’t comment on that but it would be in few hundreds of millions of dollars. We want two things — one to make a public commitment as to by when they are going to price all coal through markets and other is commitment on coal washing.
Why is a public commitment necessary?
When we spoke to the new chairman S Narsing Rao, he said that he was just following instructions from the government and the government says that the company is free to do what they want, so no one wants to move.
Also, we want them to commit publicly on washing the coal and he said that he would only make the public commitment if the government asks him to do so and the government says that the company should decide on its own.
So, we are going in circles and everyone is hiding behind each other and we don’t think it is very constructive.