Hindustan Zinc divestment: Supreme Court says no to recall of CBI investigation order

Hindustan Zinc divestment: Supreme Court says no to recall of CBI investigation order

In a setback to the government, the Supreme Court on Monday rejected it’s plea for recall of its earlier direction that asked the CBI to register a regular case in relation to 26% divestment in Hindustan Zinc in 2002.

The finance ministry had sought recall/modification of the SC’s directions on the grounds that the investigative agency had submitted incomplete information that was contrary to the record and the satisfaction was reached and recorded by the apex court based on the file notings and one “self-contained note” filed by the CBI in a sealed cover.

While dismissing the Department of Investment and Public Asset Management (erstwhile Department of Disinvestment) stand that the SC “unfortunately” did not have correct information at its disposal while giving the directions for filing a regular case, a Bench led by Justice DY Chandrachud said that that the CBI had submitted the whole files with notings and not just affidavits to it. The judges also told solicitor-general Tushar Mehta that its judgement was based primarily on the CBI’s submissions not what the petitioners (the National Confederation of Officer’s Association) had alleged.

The apex court, while permitting the government to withdraw its application, allowed it to pursue legal remedy including filing of a review petition.

Stating that he is duty-bound to place true facts on record, Mehta argued that errors had crept into “foundational facts” that the CBI had submitted before the top court.

The Supreme Court had on November 18 allowed the Centre to disinvest its residual 29.5% stake in HZL in the open market as HZL ceased to remain a government company since sale of its majority stake in 2002. However, it had taken objection to the closure of preliminary inquiry (PE) by the CBI in the HZL disinvestment during 1997-2003 and directed registration of a regular case by CBI and to fully investigate the Atal Bihari Vajpayee-led NDA government’s 2002 decision to disinvest its majority shareholding in HZL. The divestment was done during Arun Shourie’s tenure.

The government had in 2014 fiscal planned to raise at least Rs 15,000 crore through the residual stake it held in HZL and Balco. Vedanta Ltd (earlier called Sesa Sterlite Ltd) had acquired the majority shareholding of the two companies in the previous NDA regime in 2003. While the Union cabinet had approved a stake sale in Hindustan Zinc in 2014, the employee union had approached the SC alleging that Sterlite had picked up a majority stake in the PSU at an undervalued price, resulting in estimated losses running into hundreds of crores to the exchequer.

Denying any irregularity in the decision to divest 26% in HZL, the ministry said that proper procedure was followed including selection of a global adviser through global competitive bidding. Any such direction by the top court “to commence a criminal investigation after about 20 years of disinvestment, in the absence of true facts being bought before it, would severely deter global players from participating in the process of disinvestment in future which will not be in public interest,” the ministry said.

Check the source here –Source, Financial Express.