Balco dispute now goes to secy panel

NEW DELHI: With diverse views emerging from the ministry of law & justice and the attorney general on the legitimacy of Sterlite invoking the call & put option for acquiring the government’s residual stake Balco, the department of disinvestment has referred the issue to the core group of secretaries on disinvestment.

Milon Banerjee, the attorney general had pointed out that the call & put clause in the disinvestment agreements of PSUs is not tenable as it is not permitted under the Companies Act of India. The ministry of law and justice had said that the two parties should settle the matter amicably.

There are four more companies where private player partners can invoke call & put option to buy the residual stake of the government in the companies they have taken over. These include Jessop, Paradip Phosphates, Hindustan Zinc and VSNL. While Jessop was divested to Ruias, the Tata Group has taken over VSNL. Hindustan Zinc was disinvested in favour of the London-based Vedanta Resources while Paradip Phosphates is owned by Zuari Industries.

So far, it is only Balco that has asked for the government’s residual stake in the company for which it had sent a cheque worth Rs 1,098 crore. The government had duly returned the cheque based on the attorney general’s opinion on the matter. “With different views now on the government’s plate, the final view will be taken by the by the core group of secretaries,” according to senior government officials.