Legal opinion on the proposed buying of government's residual stake in Hindustan Zinc Ltd (HZL) by Vedanta is expected within a month, the Mines Ministry said today.
Legal opinion on the proposed buying of government’s residual stake in Hindustan Zinc Ltd (HZL) by Vedanta is expected within a month, the Mines Ministry said today. The Supreme Court had last year restrained the government from going ahead with any further disinvestment of its stake in HZL.
Hindustan Zinc had submitted a proposal for buying the residual government stake. “We are seeking legal opinion because there is a stay order by the Supreme Court,” Mines Secretary Mines Secretary Balvinder Kumar told PTI.
“We feel that under this proposal of buying of shares although shareholding pattern will not change but it may amount to change in the status quo. So that is why we are taking a legal opinion on this issue,” Kumar said. When asked when is the legal opinion expected, the secretary said that “may be (it may take) about a month.”
In 2002, the government sold 26 per cent stake in HZL for Rs 445 crore to billionaire Anil Agarwal-led Vedanta. The firm also acquired 20 per cent stake from the public. In 2003, it again acquired an additional 18.92 per cent in exercise of call option clause in shareholders agreement between the government and the firm. The government now owns 29.54 per cent in HZL.
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In October last year HZL CEO Sunil Duggal had said that there have been no talks on buy-back of the government’s shares in the integrated zinc producer.
Chairman of mining giant Vedanta Resources, Anil Agarwal has time and again evinced interest in acquiring the government’s remaining stake in HZL and aluminium maker Balco.
Earlier, Agarwal had said that stake sale of the government’s remaining share in HZL and aluminium maker Balco can fetch it Rs 25,000 crore.
In a setback to the government, the Supreme Court had earlier restrained it from going ahead with any further disinvestment of its minority share in HZL, the management of which is under the control of a Vedanta subsidiary.