The Oil and Natural Gas Corporation’s (ONGC) planned acquisition of the government’s stake in Hindustan Petroleum (HPCL), which is a few weeks away from being closed, had its own share of wrinkles which needed to be ironed out. The inter-ministerial group (IMG) meeting convened at 8.30 am on January 8 to finalise the broad contours of the transaction saw an upset HPCL chairman insisting that first his conditions be met. He insisted that a clause be added in the share purchase agreement with ONGC, which states that HPCL will continue to retain its “central public sector enterprise (CPSE) status and the interest of its employees will be protected”, an official said. HPCL’s CMD MK Surana, said officials, refused to sign the minutes of the IMG panel’s recommendations on the ONGC-HPCL deal that could fetch the Centre up to Rs 45,000 crore for its 51.1% stake in the company, till his demand was not met. Later on the same day at around 5 pm, another round of meeting was held at oil secretary KD Tripathi’s office, in which Surana’s demands were met and he came on board. When contacted, Surana declined to comment on the matter.
Some members of the IMG were of the view that ONGC being the new owner should be given full freedom on operational issues, including staff management. Earlier, batting for a subsidiary model, the oil ministry had said core competencies, organisational structures and work cultures of the two entities were quite different. As a subsidiary of ONGC, HPCL could continue as a separate entity within its own domain expertise, it had said. With the matter resolved, the share purchase agreement for the deal has been approved by the core group of secretaries on disinvestment. The government will soon seek financial proposals from ONGC for its stake in HPCL. The deal would boost non-tax revenues of the Centre considerably as proceeds from disinvestment alone would be about Rs 1 lakh crore against the Budget target of Rs 72,500 crore this year.