Following the U.K.-based The Children’s Investment Fund Management (TCI)’s suit filed in the Calcutta High Court, Coal India Ltd. (CIL) said that it would file its rebuttal soon.
Besides the Coal Secretary and the CIL Chairman and Managing Director, all the CIL directors by their names, have been made respondents in the suit, as have been the CMDs of the CIL subsidiaries.
It was learnt that the TCI suit rests on two main planks — ‘interference’ of the government in pricing issues, and CIL’s failure to protect shareholders’ interests.
TCI holds 1.01 per cent of the equity in CIL. The petition said that assurances made in CIL’s red herring prospectus had not been fulfilled by the management.
TCI has already filed a limited prayer suit against the Centre, and the CIL chairman in the Delhi High Court in August. The present suit is a more elaborate one, sources said. While the earlier suit mainly challenged the roll-back in prices of coal in February 2012, the current one seeks to cut a swathe across a range of issues. This ranged from losses caused to CIL due to the price roll-back to issues such as coal theft, capacity utilisation of equipment, failure to upgrade technology and delay in setting up washeries, fuel supply agreements and the proposed price-pool mechanism for coal imports, which, the petitioner said, would result in coal being sold at lower prices.
The petitioner wanted the court to give direction to the CIL board and the Government of India not to take any decision or pass any resolution which is prejudicial to shareholder interest. December 12 has been fixed as the date of hearing for this suit.
Keywords: Coal India Ltd