 "CIL issue: Coal min to meet TCI on alleged treaty violation")
With UK-based The Children’s Investment Fund (TCI) threatening legal action against CIL on various counts, the Coal Ministry is likely to meet the hedge fund this week.
In March, TCI, a minority shareholder in Coal India (CIL), had served a notice to the Indian government for alleged violations of international treaties related to its investments in the state-owned firm.
According to a top official in the ministry, TCI will meet Coal secretary Alok Perti on May 29 wherein the UK-based hedge fund would be asked, “how is treaty being violated?”
[caption id=“attachment_323751” align=“alignleft” width=“380” caption=“In March, TCI, a minority shareholder in Coal India (CIL), had served a notice to the Indian government for alleged violations of international treaties related to its investments in the state-owned firm. Reuters”]  [/caption]
TCI had said in a letter to the Finance Ministry, “The Republic of India’s recent conduct with respect to CIL has seriously impaired the business activities and operations of CIL and has contravened each of the treaties.”
The development followed CIL’s getting ready to ink fuel supply pacts with power firms for a minimum assured supply under a Presidential directive.
TCI is the biggest foreign investor in Coal India and has a minority stake in it. It has been accusing the PSU of not protecting minority shareholders’ interest and harming the company by not opposing such fuel supply pacts.The Minister of State for Coal Pratik Prakashbapu Patil earlier this month had said in a reply to the Lok Sabha that TCI had indicated that it would take legal action against CIL board for breach of fiduciary duties.
The allegations by the hedge fund against CIL include under-pricing of coal in the fuel supply agreement, compared to market level and slow implementation of setting up of washeries among others.
“The allegations levelled against CIL are relating to operational matters of CIL and CIL needs to address them as per the framework set up by the company to handle investor grievances,” the minister had said.
TCI’s investments in CIL are through TCI Cyprus Holding Ltd and Talos Capital Ltd, which is registered in Ireland.
The hedge fund had also requested for formal negotiations with Indian government on the issue for amicable settlement of the claims under the respective treaties.
“Failing such settlements within six months, we reserve our rights to initiate arbitration” in accordance with Cyprus and UK treaties, TCI had said.
PTI
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