M A I N   N E W S

SC notice to Centre on HPCL, BPCL selloff
Tribune News Service

New Delhi, July 25
The Centre’s decision to offload its equity in public sector oil companies — Hindustan Petroleum Corporation Ltd (HPCL) and Bharat Petroleum Corporation Ltd (BPCL) — was today challenged in the Supreme Court on the ground that the disinvestment in a crucial sector like this could not be done without the approval of Parliament.

A Bench comprising Mr Chief Justice V.N. Khare and Justice S.B. Sinha issued notices to the Union Government and the managements of HPCL and BPCL, seeking their replies to a public interest litigation (PIL) challenging the Centre’s decision to privatise the oil sector.

The PIL, filed by an association of the officers of the two PSUs, also sought immediate stay on the government decision, taken on January 25 this year to offload its 34.01 per cent stake in HPCL and 35.02 per cent equity in BPCL for disinvestment in the private sector.

The Bench also sought replies from the government and the PSUs on petitioner’s application for interim stay of the disinvestment process pending the final decision by the court.

Senior advocate Fali S. Nariman, appearing for the petitioner association, contended that a decision to sell its equity by the government in stratigically crucial oil sector merely on the basis of an executive order was not in the country’s interest. The approval of Parliament on such a vital issue was necessary, he argued.

While the stakes in HPCL was to be sold to a strategic partner from the private sector by the government through a bid, the disinvestment in BPCL was being done by offering equity in domestic and overseas capital market, the court was informed.

After the proposed disinvestment and offer of 5 per cent stakes at concessional rates to the employees of the two PSUs, the government’s shareholding in HPCL and BPCL would be reduced to 12 per cent and 26 per cent, respectively.

The government had taken the stand that since the two oil companies were nationalised through an Act of Parliament in early seventies, there was no need for the parliamentary approval for offloading the government stakes now.

Attorney-General Soli J. Sorabjee, whose legal opinion was sought by the government after Opposition parties had questioned its decision, had also said Parliament’s approval was not necessary.

The government had further stated that the Board of Directors of the two PSUs were competent to take decisions on issues like winding up of the company.