Orders CBI probe into 2002 divestment in Hindustan Zinc
The Supreme Court on Thursday permitted the Centre to go ahead with the proposed sale of its 29.54% residual shareholding in Hindustan Zinc Limited (HZL) in the open market.
“The Union government… is exercising its rights as a shareholder,” a Bench of Justices D.Y. Chandrachud and B.V. Nagarathna held in a 62-page judgment. The government estimates the value of its shareholding to be about ₹40,000 crore. It said the “considered decision” to offload it in the open market was to ‘strengthen revenues for public purposes’.
“Since the disinvestment of 70.5% shares in the first instance is not under challenge, HZL has ceased to be a government firm governed by the Nationalisation Act 1976. Effective management and control stand transferred to Sterlite Operations and Ventures Limited.
“The transfer of 29.54% of the residual equity shareholding by the Union Government of a company in which it has no surviving control would only raise finances for the government and does not impact management or control,” the court noted.
However, the court directed a CBI probe into the 2002 disinvestment in HZL, listing several reasons for suspecting foul play, including the decision at the time to sell 26% instead of 25%.
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