Sterlite sends legal notice to govt on Balco pactPublished by MAC on 2006-05-13
Sterlite sends legal notice to govt on Balco pact
TIMES NEWS NETWORK
13th May 2006
NEW DELHI: Seeking to acquire the residual 49% stake in Balco, Sterlite group has sent a legal notice to the government, alleging a "breach of shareholders' agreement".
The notice follows the payment of Rs 1,098 crore by Sterlite to acquire the remaining stake in the company. Sterlite had earlier bought a majority stake in the erstwhile public sector unit for Rs 551 crore in '01. According to agency reports, the group's director (finance) Tarun Jain has, however, said they would not comment on any developments regarding Balco.
However, there are reservation within the government, with the committee of secretaries considering the attorney general's advice to not sell the 49% stake in Balco at a price which Sterlite was willing to pay.
According to the shareholders' agreement signed when Sterlite bought Balco, the Anil Agarwal-controlled company was given the option to buy the remaining stake by '04. As the process could not be completed before '04 due to procedural delays, the attorney general advised the government to either renegotiate the value of the 49% stake or sell it to public. The attorney general also said that the government has an option of not selling its stake in Balco at all.