HIGH STAKES

New Delhi, March 29: Indian Oil Corporation (IOC) and West Bengal Industrial Development Corporation (WBIDC) today asked The Chatterjee Group (TCG) to honour the Haldia Petrochemicals (HPL) board resolution approving allotment of shares to IOC.

Solicitor-general G.E. Vahanvati, who was representing IOC before a bench chaired by CLB chairman S. Balasubramanian, said: “The petitioner has to honour the unanimous resolution passed by the HPL board, which sought its approval for the allotment of shares to IOC.”

IOC's counsel said, “The petitioner (TCG) had voted in favour of the resolution, passed by the board of HPL, regarding approval for transfer of shares to IOC.”

The Chatterjee Group had asked the Company Law Board (CLB) to make the resolution “void”.

“TCG thus has no right to term the resolution as invalid and its appeal is misconceived,” IOC counsel said.

The representatives of WBIDC also refuted allegations about “suppression of information”.

In the petition filed with the CLB last year, The Chatterjee Group had alleged that the Bengal government, represented by the WBIDC, issued shares to IOC without its consent. IOC has been allotted a 7.5 per cent stake in HPL for Rs 150 crore.

As TCG is the majority stakeholder, its lawyers had argued that the group reserved the pre-emptive right to any share allotment and should have been given the first right of refusal for the shares.

The TCG lawyers had alleged that the shares were allotted “secretly and surreptitiously” by the Bengal government in violation of the 1994 agreement with the group.

To solve the long-running tussle for control of HPL, the CLB chairman had suggested a formula, which entailed TCG not contesting the Rs 150-crore share allotment to IOC and the Rs 135-crore share pledge to financial institutions (led by IDBI) under the corporate debt restructuring package.