SBI, lndianOil eye Haldia board berth
Kolkota   28-Feb-2012

The State Bank of India and IndianOil have asked for a place on the board of Haldia Petrochemicals Ltd (HPL) as the two public sector behemoths seek a bigger say in the state’s showcase project.

The SBI and IndianOil have written to the company demanding board berths after the Supreme Court judgment on September 2011 removed the fetters on the appointment of directors. IndianOil has nominated its director (finance) Pravin K. Goyal. State Bank is yet to name its nominee.

IndianOil has around 9.6 per cent stake in HPL, while the SBI is the leader of the lenders’ consortium for a working capital loan of more than Rs 1,000 crore.

IndianOil was keen to take a strategic stake of at least 26 per cent in HPL, but the plan was nixed following the opposition of private promoter The Chatterjee Group.

After the Supreme Court verdict, which turned down TCG’s demand for a majority stake, IndianOil revived its interest following the Bengal government’s decision to auction its shares.

IndianOil was eligible for a board membership when it invested Rs. 150 crore equity in HPL in 2004. Soon after, principal promoters — The Chatterjee Group and the West Bengal Industrial Development Corporation — locked horns in a legal battle, and the consequent court decision to freeze any change in the composition of the board denied Indian Oil a berth.

The SBI, on the other hand, is seeking a representation on the basis of a recent working capital loan agreement between the lender and the company.

Not only IndianOil and the SBI but also Winster, a TCG firm, has demanded a board seat. It has selected Kishor Bhattacharya as a nominee citing its funding of Rs 127 crore in HPL in 2004. Moreover, the Bengal government has three directors on the board and can add one more. Traditionally, the state has put its own man as the chairman of HPL such as Tapan Mitra and Tarun Das.

At present, the HPL board has 14 members. Apart from the three nominees of the Bengal government, there are four from TCG, five from financial institutions, one independent director (Jamshyd Godrej) and managing director Partha Bhattacharyya.

The company has no permanent chairman now. After Tarun Das stepped down in May, TCG head Purnendu Chatterjee has been officiating as the chairman.

The company is yet to fix a date for the next board meeting, which should take place in March. All the applications for the new board positions are likely to be discussed at the meeting. The stance to be taken by the two principal promoters on the issue will be keenly watched. TCG had earlier opposed the induction of an IndianOil nominee and also resisted the conversion of lenders’ debt into equity. The Mamata Banerjee government, on the other hand, is unlikely to oppose the PSU board berths, but the same can’t be said about Winster’s plea.