New Delhi: The Children Investment Fund Management (UK) Llp, or TCI, filed a writ petition in the Delhi high court against India’s coal ministry and Coal India Ltd, in which it is a minority shareholder, challenging their moves to keep prices artificially low.
An official in the coal ministry said the case was listed on Wednesday and the date for the hearing has been set in December. TCI has, in its petition, sought to quash a 25 January letter by then coal secretary Alok Perti to Coal India instructing the company to revise a price hike made in December, TCI said in a release.
The fund has sent notices to the ministry and Coal India. The coal ministry official said the notice has been received. “Our ground is very clear and we have also stated this in the red herring documents of Coal India,” said the official. “We have clearly stated the role of Coal India takes into account the national interest.”
TCI has argued that coal prices are deregulated in India and the ministry does not have the legal authority to interfere with Coal India decisions, it said.
It has sought a direction by the high court to the ministry not to interfere with the pricing mechanism in any manner as selling coal at a lower price harmed shareholders by lowering profit, the fund said.
TCI has less than a 2% stake in Coal India, but its complaints against the miner earlier this year highlighted the problems arising out of government interference in the working of public sector companies, and were seen as generating awareness about shareholder activism in India.
The fund also filed a notice to the government on 16 May of a dispute arising under treaties India has with the UK and Cyprus for mutual promotion and protection of investors.
This is expected to come up for arbitration in an international court later this year, TCI has said.
The coal ministry official said the government will “legally examine” whether two cases can run parallel to each other as claimed by TCI.
Coal India fell 2.73% to Rs 349.50 on BSE on Wednesday. The benchmark Sensex was nearly unchanged at 17,257.38 points.