Questioning the government's “hurry” to divest its remaining stake in the Hindustan Zinc Ltd (HZL), the Supreme Court on Tuesday directed the Centre to put on hold a plan to offload its 29 per cent shares in the erstwhile public sector unit now a subsidiary to Vedanta.
HZL, which deals with strategic minerals, was first divested of majority stakes in 2003 to Vedanta.
“What is the hurry to hand over valuable assets worth lakhs of crores? Without permission of the court, you can't go for disinvestment,” a Bench led by Chief Justice of India T.S. Thakur asked the government represented by Attorney General Mukul Rohatgi.
Chief Justice Thakur insisted on status quo pertaining to disinvestment of Hindustan Zinc Ltd, while advising the government against bowing out of HZL. “Don't do this and don't go for the disinvestment. We will hear the matter. We will not allow you to sell,” Chief Justice Thakur said.
When Vedanta counsel and senior advocate C.A. Sundaram pointed out that HZL was a loss-making unit when his client took over over a decade and a half ago, and now it has been transformed into a profit venture, Chief Justice Thakur responded, “Yes, it was once loss-making and today it is making profit. So let the government also make some profit.”
The court made it clear that the restraint was not meant as a roadblock for Vedanta's operations in HZL, but only a pause on the government's plans to sell its residual stakes till the court finally decides on the issue.
The Bench took serious view of a submission made by advocate Prashant Bhushan, appearing for petitioner National Confederation of Officers' Associations of Central Public Sector Undertakings, about alleged violations of law in the first disinvestment.
“Already there are allegations of you having committed a wrong and we would not allow a second transgression,” the court told the government.
The petition has alleged the proposed disinvestment to be “illegal, mala fide and arbitrary”.
When pressed for the reason behind the move to disinvest, Mr. Rohatgi maintained that it was a policy decision.
“What is compulsion for you to disinvest? You can't do this without amending the law as the company was formed as an Act of Parliament,” the court said even as the Attorney-General submitted that parliamentary sanction was not required for disinvestment.
