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A-G seeks papers on oil PSUs divestment

By Our Special Correspondent

NEW DELHI JAN. 10. The Attorney-General, Soli Sorabjee, is understood to have sought all relevant documents from the Disinvestment Ministry before taking a final view on the legal issues involved in the privatisation of public sector oil companies.

Informed sources say that Mr. Sorabjee met the Disinvestment Secretary, Pradip Baijal, only today to seek the required background material before giving his opinion. His views had been sought on dealing with nationalised companies such as the Hindustan Petroleum Corporation Limited (HPCL) and Bharat Petroleum Corporation Limited (BPCL) under the provisions of the Company Law Act for purposes of disinvestment. The issue had arisen since several members of Parliament had insisted that the initial legislation nationalising these companies would have to be repealed before any disinvestment can take place.

As a result, the last meeting of the Cabinet Committee on Disinvestment (CCD) deferred a decision on strategic sale of HPCL to await the view given by the Attorney-General. Earlier, in the absence of the Attorney-General, the Government had sought the opinion of the Solicitor-General who had taken the stand that these companies can be disinvested under the provisions of company law.

With reports circulating today that the Attorney-General will delay giving his opinion, sources here stressed that Mr. Sorabjee had not given any deadline for submitting his view. Besides, he apparently feels that this is a highly-sensitive issue and careful consideration is needed on all aspects of the problem.

He has therefore sought relevant documents from the Disinvestment Ministry which includes all the data on disinvestment guidelines as well as material relating to the disinvestment of Maruti Udyog Limited (MUL).

The latter is essential since the Disinvestment Ministry has been arguing that MUL was also a nationalised company and it has been divested of government equity under the provisions of company law.

With this precedent, the Ministry has pointed out that after nationalisation, such companies are governed for all intents and purposes by company law rather than the take-over law.

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