The Kerala High Court on Tuesday stayed the operation of an order issued by the Central government intimating the Kannur International Airport Limited (KIAL) that an auditor appointed by the Comptroller and Auditor-General of India (CAG) would do the audit of the company.
The stay order came on a writ petition filed by the KIAL against the Centre’s decision.
According to the petitioner, Section 139(5) (appointment of an auditor by the CAG) is applicable only to a government company as defined in Section 2(45) of the Companies Act 2013 or any other company owned or controlled, directly or indirectly by the Central government or by any State government or governments or partly by the Central government and partly by one or more State governments.
Share pattern
The petitioner said that a perusal of the shareholding pattern of the KIAL makes it clear that the State government held only 39.25% of the paid up share capital of the petitioner.
The Centre did not hold even a single share in the petitioner company. Thus, the petitioner did not come under the definition of a government company. In fact, only Central government PSU holding shares of the petitioner was Bharat Petroleum Corporation Limited (BPCL), which had 16.21% of the paid up share capital of the petitioner.
The Central government holds only 53% of BPCL shares. Thus, by no stretch of imagination can the shares held by BPCL be said be ‘indirectly’ ‘owned’ by the Central government
The KIAL also pointed out that Deloitte, an auditing firm appointed by the petitioner had already been undertaking the audit of the petitioner company with utmost diligence and in accordance with law.
