CIL must charge more for coal, demands UK hedge fund TCI
8 Dec 2012 7:25 AM IST
The Delhi High Court on Friday granted four weeks time to UK-based The Childrens Investment (TCI) Fund, a shareholder in Coal India Ltd (CIL), to respond to the reply of the Union government opposing the hedge fund management’s plea that the Centre is interfering with the pricing of coal.
‘The petitioner (TCI) is allowed to file the rejoinder (to the reply of Ministry of Coal) within four weeks. List the matter for hearing on May 9,’ Justice Rajiv Shakdher said.
Earlier, The Childrens Investment Fund had moved the High Court alleging that the Ministry of Coal has not been allowing the public sector undertaking (PSU), CIL, to function independently as a company and has been interfering in coal pricing to the detriment of the commercial interests of the hedge fund management.
The Centre, however, in its reply has denied the allegations leveled by The Childrens Investment (TCI) Fund. TCI also moved the Calcutta High Court in October against the CIL directors, alleging that they had failed to perform their duties with adequate care and skill, leading to substantial financial losses for the PSU major.
It alleged that losses were caused by the decisions to reverse a price increase made on December 31, 2011, failing to raise coal prices to market levels, and failing to take steps to increase and streamline production, causing loss of revenue and leading to coal blocks being allocated to third parties.
It has also alleged that the directors failed to take an appropriate stand against the draft mining bill and to stop theft of coal. TCI had also claimed in a press statement that by the end of the current fiscal (2012-13), ‘CIL will have lost Rs 8,700 crores in pre-tax profits by reversing the price increase of December 31, 2011. Further, by failing to raise FSA coal prices to market levels, the directors have cost CIL a staggering Rs 215,250 crore in pre-tax profits since the IPO.’ The petition before the Calcutta High Court is likely to come up for hearing on December 12.
COALMIN CONSULTS LAWMIN ON DE-ALLOCATED PSU BLOCKS
The Coal Ministry has approached the Law Ministry seeking its advice on giving back five deallocated coal blocks of public sector undertakings (PSUs), including three of NTPC. 'The Coal Ministry sent the file to the Law Ministry a couple of days back and sought its advice on giving back of the de-allocated blocks to firms like NTPC,' a government official said.
The Coal Ministry had said last month that it would take a call on giving back five de-allocated coal blocks to PSUs, including NTPC, after consultations with the Law Ministry. While three had been allocated to NTPC, one each had been given to Damodar Valley Corporation (DVC) and the Jharkhand government respectively, said Coal Secretary S K Srivastava.
Power Minister Jyotiraditya Scindia had last month asked Coal Minister Sriprakash Jaiswal to reconsider the decision on de-allocation of four blocks, including three alloted to NTPC.
Asked under what provision the de-allocated blocks could be given back, Srivastava had replied, 'It is not the provision.'
'The point was that before these rules (amended rules for auction of coal blocks) were notified, the in-principle decision was taken that these blocks will be given back to NTPC on the basis of certain assurances that they give with regard to exploration.'
He had said, 'It is that provision under which we will give it (blocks) back. This was the decision which was taken by the review committee before the rules were notified.' The Coal Ministry had last year de-allocated three coal mines — Chatti-Bariatu, Kerandari and Chatti-Bariatu (S) in Jharkhand — of NTPC for not developing them within the stipulated timeframe.
The three mines allotted to NTPC have an annual production capacity of 13 million tonnes (mt).
‘The petitioner (TCI) is allowed to file the rejoinder (to the reply of Ministry of Coal) within four weeks. List the matter for hearing on May 9,’ Justice Rajiv Shakdher said.
Earlier, The Childrens Investment Fund had moved the High Court alleging that the Ministry of Coal has not been allowing the public sector undertaking (PSU), CIL, to function independently as a company and has been interfering in coal pricing to the detriment of the commercial interests of the hedge fund management.
The Centre, however, in its reply has denied the allegations leveled by The Childrens Investment (TCI) Fund. TCI also moved the Calcutta High Court in October against the CIL directors, alleging that they had failed to perform their duties with adequate care and skill, leading to substantial financial losses for the PSU major.
It alleged that losses were caused by the decisions to reverse a price increase made on December 31, 2011, failing to raise coal prices to market levels, and failing to take steps to increase and streamline production, causing loss of revenue and leading to coal blocks being allocated to third parties.
It has also alleged that the directors failed to take an appropriate stand against the draft mining bill and to stop theft of coal. TCI had also claimed in a press statement that by the end of the current fiscal (2012-13), ‘CIL will have lost Rs 8,700 crores in pre-tax profits by reversing the price increase of December 31, 2011. Further, by failing to raise FSA coal prices to market levels, the directors have cost CIL a staggering Rs 215,250 crore in pre-tax profits since the IPO.’ The petition before the Calcutta High Court is likely to come up for hearing on December 12.
COALMIN CONSULTS LAWMIN ON DE-ALLOCATED PSU BLOCKS
The Coal Ministry has approached the Law Ministry seeking its advice on giving back five deallocated coal blocks of public sector undertakings (PSUs), including three of NTPC. 'The Coal Ministry sent the file to the Law Ministry a couple of days back and sought its advice on giving back of the de-allocated blocks to firms like NTPC,' a government official said.
The Coal Ministry had said last month that it would take a call on giving back five de-allocated coal blocks to PSUs, including NTPC, after consultations with the Law Ministry. While three had been allocated to NTPC, one each had been given to Damodar Valley Corporation (DVC) and the Jharkhand government respectively, said Coal Secretary S K Srivastava.
Power Minister Jyotiraditya Scindia had last month asked Coal Minister Sriprakash Jaiswal to reconsider the decision on de-allocation of four blocks, including three alloted to NTPC.
Asked under what provision the de-allocated blocks could be given back, Srivastava had replied, 'It is not the provision.'
'The point was that before these rules (amended rules for auction of coal blocks) were notified, the in-principle decision was taken that these blocks will be given back to NTPC on the basis of certain assurances that they give with regard to exploration.'
He had said, 'It is that provision under which we will give it (blocks) back. This was the decision which was taken by the review committee before the rules were notified.' The Coal Ministry had last year de-allocated three coal mines — Chatti-Bariatu, Kerandari and Chatti-Bariatu (S) in Jharkhand — of NTPC for not developing them within the stipulated timeframe.
The three mines allotted to NTPC have an annual production capacity of 13 million tonnes (mt).
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