Supreme Court rejects Vedanta’s plea regarding Govt stake in HZL

11 Jul 2023 , 11:49 AM

On Monday, the Supreme Court rejected Vedanta’s request that it order the Centre to sell its remaining 29.54% interest in Hindustan Zinc (HZL) on the open market, stating that it had no right to interfere with a ‘policy decision.’

In rejecting Vedanta’s motion, a Bench chaired by Chief Justice DY Chandrachud stated that the company’s decision to forfeit its call option was not contingent on the government’s agreement to sell its stock in the open market.

‘We cannot force them (the government). The Union may claim that the current state of the market prevents it from obtaining the best price, the CJI said.

Vedanta asserted that its offer to purchase at fair market value was predicated on the assumption that the government would be selling its remaining stake in HZL through an ‘Offer For Sale’ in accordance with SEBI guidelines or any other agreed mode of dilution through a fair and transparent bidding process and that it was ready to take part in the same as any other eligible bidder. The CJI’s response followed Vedanta’s argument.

The government had opted to sell its remaining stock in the open market, and even the Supreme Court had pledged in its order from November 18, 2021, that it would not insist on its contractual rights to acquire the shares at a set price, the company claimed.

‘The applicant conceded to not exercising its call option rights and sought to seek withdrawal of its claim before the arbitral tribunal only on the strength of the undertaking given by UoI in its affidavit of April 12, 2021, and expecting the UoI to act in a reasonable manner, in compliance with the terms of the 2002 shareholders agreement, and within a reasonable time,’ Vedanta said.

For feedback and suggestions, write to us at [e-mail]