CLB upholds sale of Haldia equity to IOC

New Delhi, Aug 5 | Updated: Aug 6 2005, 05:37am hrs
In an interim order on Friday, the Company Law Board (CLB) upheld the West Bengal governments decision to sell 7.5% equity in Haldia Petrochemicals (HPL) to Indian Oil Corporation (IOC) till it issues a final order.

The order was passed on a petition filed by the Chatterjee group (TCG) controlled by Purnendu Chatterjee which had challenged the sale of shares to IOC saying it had the first right of refusal over those shares.

In his order, CLB chairman S Balasubramanian said, It appears to me, prima facie, that IOC is a bonafide allottee of the impugned shares for valuable consideration. Therefore, at this stage I do not propose to put any fetters on the right of IOC on the shares other than stipulating that the impugned allotment shall be subject to the final order on the petition.

The final hearing on the matter has been fixed for September 26 and 27. Even after the allotment of shares, the Chatterjee group would continue to hold majority of shares (53%).

In case shares are allotted to lenders in terms of the corporate debt restructuring package as directed by IDBI, TCG group would be reduced to minority. Hence, the company has been directed to defer allotment of further shares till the final disposal of the petition.