Screjects Centre’sbidtoreview CBI probe into HZL stake sale
The NDA government had disinvested 26% of HZL equity in 2002 through sale to SOVL
NEW DELHI: Over five months after the Supreme Court ordered a Central Bureau of Investigation (CBI) probe into the irregularities in the initial sale of the government’s stake in Hindustan Zinc Limited (HZL), the Government’s attempt to review the judgment has failed. The Supreme Court, earlier this month dismissed the Centre’s review petition challenging the November 18, 2021 decision stating that it lacked merit.
The order passed on May 4 by a bench of justices Dhananjaya Y Chandrachud and BV Nagarathna said, “We have carefully gone through the review petition and the connected papers. We find no merit in the review petition and the same is accordingly dismissed.” The petition was decided in chambers by the judges as they even rejected the request by the Centre to hear the matter in open court. “Application for listing the review petition in open Court is rejected,” the order said.
While the Centre may contemplate the option to file a curative petition, the Central Bureau of Investigation (CBI) has already proceeded in the matter by registering a first information report (FIR).
The Court is monitoring the progress of the case and had heard the matter on April 29 when CBI informed the Court about the latest development on the FIR registration. CBI further agreed to submit a status report by July 15, the next date of hearing.
The November 2021 decision came on a petition filed by the National Confederation of Officers Association of Central Public Sector Enterprises who approached the top court in 2014 raising irregularities in the decision taken by the National Democratic Alliance (NDA) government in 2002 to disinvest 26% of HZL equity through strategic sale to Anil Agarwal-owned Sterlite Opportunities and Ventures Ltd (SOVL).
HZL was incorporated as a public sector firm in 1996. SOVL, which emerged as the highest bidder, offered ₹40.5 per share for the government’s stake. The transaction was completed in April 2002. Later, the government further divested around 19% stake at the same price to the private entity in November 2003. In all, the government mopped up around ₹769 crore by selling 45% stake in HZL.
SOVL also acquired 20% of shares from the market through an open offer. HZL was loss making when the divestment happened.
The basis for the Court to order CBI probe was a preliminary enquiry (PE) investigation by CBI into the earlier sale along with the report by the comptroller and auditor general (CAG), which probed the allegations of the petitioners that to benefit some, the price per share was undervalued.
Accordingly,
the Court directed CBI to register a regular case into the 2002 HZL disinvestment and submit quarterly status reports. However, the Court did not interfere with the Centre’s decision to further disinvest its remaining share of 29.5% in HZL.
The Centre, earlier this year, moved an application in the top court for recall of the November 2021 decision by alleging that CBI bungled up the probe.
This application was withdrawn by the Centre on February 7 after the Court stood firm that its order was based on documents and file noting produced by CBI and the same could not be doubted as “incorrect facts” as sought to be projected by Centre. However, the Court allowed the Centre to pursue other remedies to challenge the judgment, which included filing of review petition.
Last month, CBI filed a status report before the top court indicating that a review petition had been filed by Centre and the agency was awaiting the order on the review petition to further proceed with the investigation. The Court on April 8 took serious exception to this stand taken by CBI and said, “CBI has to comply with our order. You cannot say that we will not comply with the order pending review.”