Tangled tug of war

Purnendu Chatterjee’s two year-old battle with the West Bengal government over control of joint venture company, Haldia Petrochemicals (HPL) has taken another turn. On September 21, the state government congratulated itself for having wrested control from Chatterjee’s The Chatterjee Group (TCG), following a Calcutta High Court order setting aside an earlier order by the Company Law Board in January this year that directed the West Bengal Industrial Development Corporation (WBIDC) to sell its stake to TCG and exit the venture.

The High Court also upheld the government’s decision (taken in 2005) to sell a 9.62 per cent stake (owned by WBIDC) in HPL to Indian Oil Corporation. “IOC will now play a greater role in HPL and that will be good since they are the anchor investor in the proposed chemical hub (coming up in Haldia),” says state Industries Minister, Nirupam Sen.

Does that mean HPL will slip out of Chatterjee’s hands? Just four days after the High Court decision, TCG filed a special leave petition with the Supreme Court, which ordered status quo for four weeks on the grounds that certified copies of the High Court order had not been made available to the concerned parties. As a result, a board meeting slated for October 1 that was to discuss a number of contentious issues has been postponed till October 29. Meanwhile, there’s argument over who owns how much of HPL.

The state claims that WBIDC has 43.27 per cent stake in HPL, while Tata Sons has 2.88 per cent, IOC 9.62 per cent (adding up to 55.77 per cent), while TCG has 44.23 per cent. The TCG camp, however, challenges this and says: “In the present scheme of things, TCG has 59.9 per cent stake while the state has 36.88 per cent and the Tatas have 3.2 per cent. However, if the state’s controversial stake sell out to IOC is taken into account, then the equity structure on expanded capital would be TCG 54 percent, WBIDC 33 per cent, Tatas 2.8 per cent and IOC 9.6 per cent.” Chatterjee’s best hope now is the apex court.