Date:29/09/2005 URL: http://www.thehindubusinessline.com/2005/09/29/stories/2005092901940200.htm

Back CLB asks Bengal Govt, TCG to settle Haldia Petrochem dispute

Our Bureau

New Delhi , Sept. 28

THE Principal Bench of the Company Law Board (CLB) on Wednesday has asked The Chatterjee Group (TCG), one of the major stakeholders in Haldia Petrochemicals Ltd (HPL), West Bengal Government, and the West Bengal Industrial Development Corporation (WBIDC) to try to resolve the differences over the control in Haldia Petrochemicals.

The Principal Bench comprising the CLB Chairman, Mr S. Balasubramanian, said that the matter would be heard for three days from October 26. "During this period, the parties may try to resolve the dispute amicably," the bench said.

During the hearing, TCG was asked by CLB to meet the West Bengal Chief Minister, Mr Buddhadeb Bhattacharya, and present its proposal to resolve the case and work out a compromise formula. Both, WBIDC and TCG, also agreed to defer EGM of the company slated for October 14. The parties agreed that they would convene the meeting and adjourn without transacting any business.

The CLB suggestion came after a two-day hearing of the matter. During the hearing, TCG said that if WBIDC wanted to dilute its stake in HPL, the first right of refusal was with it. CLB was hearing the main petition filed by TCG in August this year seeking restrain on share transfer of HPL to Indian Oil Corporation.

IOC, which is to invest Rs 150 crore in the company for a 7.5-per cent stake with representation on the company's board, had become a bone of contention between the two parties. According to TCG, which had the right of first refusal, whenever the Tatas or the West Bengal Government wanted to exit HPL, the option was not given to them. The West Bengal Government has 36 per cent stake in HPL, TCG holds about 53 per cent and Tatas hold three per cent.

HPL is a three-way joint venture between Dr Purnendu Chatterjee of Chatterjee Petrochem (Mauritius) Company (CPMC, a TCG Group company), WBIDC and the Tatas.

WBIDC and TCG are the majority partners in the company with the Tatas holding a minority share. In its earlier ruling, the CLB had said that status quo of shareholding pattern of all stakeholders as on August 5 be maintained. The main contention of the CPMC, and others, was that in spite of various agreements between them and WBIDC and the West Bengal Government that the shares held by WBIDC would be transferred to them, in a complete breach of trust and confidence, the two refused to do so.