Home >companies >news >CBI files preliminary enquiry against Vedanta chief Anil Agarwal

New Delhi: The Central Bureau of Investigation (CBI) has registered a so-called preliminary enquiry against Vedanta Resources Plc chairman Anil Agarwal and others in a case related to suspected irregularities in the divestment of a stake in Hindustan Zinc Ltd more than a decade ago.

The preliminary enquiry has also been initiated against “unknown officials", a spokesperson for CBI said on Monday, declining to give further details.

Mint couldn’t immediately ascertain whether the suspects include officials from the disinvestment and the mines ministries at the time of the sale of a 26% stake owned by the government in the company to Sterlite India, now a part of Vedanta, for 445 crore.

“We will not like to speak on the CBI inquiry. However, we would like to say that today Hindustan Zinc is the world’s largest integrated zinc producer. Since disinvestment, it has grown more than fivefold," a spokesperson for Vedanta said in an emailed statement.

“At the time of disinvestment, the company’s reserves and resources were 143.7 million tonnes (mt), which have been increased through rigorous exploration to 348 mt. Since disinvestment company has successfully executed four phases of expansion plans with an investment of 12,000 crore," the statement said.

The disinvestment in Hindustan Zinc took place in 2002, when the Bharatiya Janata Party-led National Democratic Alliance government was in power in New Delhi.

Notices will soon be sent to Agarwal and officials of the ministries of disinvestment and mines to join the probe along with records of the stake sale, PTI cited CBI officials, whom it didn’t name, as saying.

A statement issued by the then ministry of disinvestment at the time of the divestment had justified the stake sale, saying there had been a spurt in the share price of Hindustan Zinc following the successful disinvestment of several other state-owned companies, including Videsh Sanchar Nigam Ltd to the Tata group.

A second CBI spokesperson said that the preliminary enquiry was registered against Agarwal and other officials “almost a month ago".

Preliminary enquiries are registered by CBI in cases where it doesn’t have sufficient evidence for registering a so-called regular case, or RC. A preliminary enquiry is usually converted into an RC after sufficient evidence is gathered, or closed if no evidence is found.

The Vedanta Group also acquired a majority stake in Bharat Aluminium Co. Ltd at the same time.

The deal has been controversial for two reasons. One, the government has dragged its feet over the sale of its residual stake in the company to Vedanta. Two, the valuation of Hindustan Zinc has come under a cloud following allegations that the government’s valuer ignored some of the assets (mines) of the firm.

Subsequent to the 26% stake sale in 2002, the government in 2003 sold an additional 18.92% of Hindustan Zinc to Sterlite for 323.88 crore. Sterlite acquired another 20% through an open offer to public shareholders. The government continues to hold a 29.5% stake in Hindustan Zinc.

Sterlite Industries merged with Sesa Goa, also a part of Vedanta, earlier this year.

Hindustan Zinc closed 0.22% higher to 135 on BSE on Monday, a day the benchmark Sensex gained 0.1% to 21,101.03 points. The news of the preliminary enquiry came after market hours.

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