Indian Oil Corporation (IOC) is contemplating to move court against the West Bengal government accusing it of not complying with the provisions of the share purchase agreement made for offering the government stake in Haldia Petrochemicals (HPL).

The government, which has offered 31% stake in HPL, in the share purchase agreement said the financial bid would be opened on the day the bids were submitted. While the deadline for submitting the bid s was 11 am on October 7, the bids were supposed to be opened at 3 pm on the same day.

?We were the only bidders until the cut off time and thereafter we went to meet West Bengal chief minister Mamata Banerjee. After we came back to WBIDC we were informed that Reliance has also submitted the bid,? an IOC official present during the proceedings said, adding that ?how can a government accept a bid after the time is over.”

This must have been done with a malafide intention, he said.

The official said the government till now was not considering IOC as the sole bidder and if it didn’t agree to it within a few days, it could move the court. A source close to the development told FE even as Reliance officials were present in Kolkata a day ahead of the bidding day, it was not understood what made them to submit the bid after the deadline.

A company insider said even if the government considered IOC as the sole bidder, IOC would be disqualified from taking up the stakes because it doesn’t conform the articles of association. The articles of association mandates HPL to be a private sector company but the government flouted the articles of association taking over the management control through conferring voting rights on prefrential holding, which it issued for itself. The government has also offered its 100% prefrential holding for sale.

IOC’s present 8.8% holding in HPL is also subjudice for which it couldn’t appoint a director in the HPL board. Moreover, IOC directors if joined the HPL board would have been disqualified since article 274 (1g) of the Companies Act says directors of a company could be disqualified if they participated in the proceedings of any other company, which is subjudice or is contravening the provisions of the law ( Companies Act).

There are a number of legal disputes surrounding HPL, so IOC’s picking up stake would not conform the provisions of the Companies Act, an HPL official said.

IOC is, however, trying to press the government that it makes a direct offer bringing about a change in the articles of association but co-promoter Purnendu Chatterjee would not allow this. Chatterjee has already obtained a Calcutta High Court stay on transfer of government’s entire share and has already moved the International Court of Law against the Supreme Court order and submitted a petition to the Supreme Court asking it to review the judgement, on whose strenght the West Bengal government has taken over the management control.

While the SC has admitted the review petition, TCG has moved the international court arguing that the MoU signed on the behest of India at the US has been flouted by putting the FDI at risk.

HPL had got 100% FDI from Purnendu Chatterjee.

However, West Bengal commerce and industry minister Partha Chatterjee said Deloite has been asked to finalise everything about the procedures of disinvestment in 3-4 days. He said only a submitting bid’s won’t do. The government was yet to fix reserve price for the bid.