Date:27/02/2005 URL: http://www.thehindubusinessline.com/2005/02/27/stories/2005022701710300.htm

Back Bombay HC stops Dabhol stake transfer to GE, Bechtel

Our Bureau

Mumbai , Feb. 26

The Bombay High Court on Friday ordered a stop to the transfer of ownership of equity shares acquired by the US companies General Electric and Bechtel, in the Dabhol Power Company.

The HC has ordered that the transfer of first tranche of 49 per cent out of the total 65.85 per cent stake be stopped.

The HC order was passed on a petition filed by Maharashtra Power Development Corporation Ltd (MPDCL), a subsidiary of the State Electricity Board that holds 14.15 per cent stake in DPC.

GE Corp and privately held Bechtel Corp had won approval from a US bankruptcy court to buy energy firm Enron's 66 per cent stake in the DPC project, increasing at one stroke their negotiating power with Dabhol's lenders. GE and Bechtel already owned 10 per cent each of Dabhol's $1-billion equity.

MPDCL had contested that as a DPC shareholder, it was not informed about GE and Bechtel acquiring Enron's 65.85 per cent stake in the beleaguered power company. MPDCL had called the purchase illegal and had opposed the acquisition saying GE and Bechtel had violated the shareholders' agreement.

It expressed interest in buying part of the stake and even offered a cheque of Rs 18 crore to the HC to prove its point.

The companies had acquired the stake in DPC held by Enron Mauritius through subsidiaries based in Holland and Mauritius.