A crucial meeting of the board of directors of the beleagured Haldia Petrochemicals Ltd (HPL) on Monday reached a consensus on the need for securing a speedy resolution to the ownership dispute without triggering any further litigation. The board also agreed to finance the Rs.200-crore new butene-1 extraction plant entirely through debt.

Purnendu Chatterjee, who chaired the meeting, said “We should move. Everyone understands the urgency. The board expressed the need to ensure a speedy resolution of the ownership dispute in a transparent manner without triggering any further litigation”.

Various legal opinions obtained by the company management on the contentious and pending issue of 15.5-crore shares which were agreed to be registered in favour of The Chatterjee Group companies in 2002 was also placed before the board.

“They played a major role in the forging this consensus on resolving the ownership dispute.

“The legal experts have said that the 2002 deal is concluded and sealed, leaving little scope of ambiguity”, a source said.

Majority control

The 15.5 crore shares would give TCG majority control of the company in which the Tatas and Indian Oil Corporation too are minority stakeholders and had been at the centre of a raging dispute between TCG and the previous government. The dispute is unresolved even after the conclusion of a long round of court cases recently.

Lenders and rating agencies had recently expressed concern over the ongoing ownership dispute saying that it was harming HPL. All the 14 board-members of the joint venture company, barring one, attended the meeting. The government representatives were all present as were the five representatives of the banks and the financial institution, it was learnt.

The meeting took place at a time when the finances of the state's showpiece industry were in tatters with a Rs 418 crore loss being reported in the first-half of the current fiscal. HPL is facing frequent shutdowns on account of the faulty implementation of an expansion project.Its current capacity utilisation is only around 88 per cent and the board underscored the need to achieve 100 per cent capacity utilisation fast.

“The board took stock of the business situation, the plant operations and HPL's financial performance uptil November 2011,” said a release.

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