TCI TAKES COAL INDIA TO COURT: THREATENS TO SUE THE BOARD
TCI ON THE OFFENSIVE
The Children's Investment Fund (TCI) which owns about 1% stake in Coal India today threatened to sue the entire board of the public sector behemoth after filing a writ petition in the Delhi High Court alleging breach of fiduciary duties by Coal India. In its petition TCI has argued that coal prices are completely de-regulated and the Indian Coal Ministry does not have legal authority to interfere with the discretion with CIL as it has been doing on a regular basis. The petition also argues that the January revision in the price is also illegal being a direct consequence of the illegal and invalid instructions of the Ministry. In its petition TCI has also sought a direction by the High Court to the Ministry not to interfere with the pricing mechanism in any manner. TCI also believes that the FSA system of distributing coal has an inbuilt risk of engendering corruption and has drawn strong parallels between the corruption related to the allocation of the 2G spectrum and selling FSA (Fuel Supply Agreement) coal below market prices.
TCI THREATENS TO SUE THE BOARD
In addition to its writ action in the High Court TCI has also threatened to sue the Board of Coal India for breach of fiduciary duties and abuse of minority shareholders. It alleges that the directors' continued failure to expedite ramp up of coal washing capacity and raising coal prices is further evidence of their unwilligness and inability to run Coal India to the best of shareholders' interests.
TCI ON THE OFFENSIVE
The Children's Investment Fund (TCI) which owns about 1% stake in Coal India today threatened to sue the entire board of the public sector behemoth after filing a writ petition in the Delhi High Court alleging breach of fiduciary duties by Coal India. In its petition TCI has argued that coal prices are completely de-regulated and the Indian Coal Ministry does not have legal authority to interfere with the discretion with CIL as it has been doing on a regular basis. The petition also argues that the January revision in the price is also illegal being a direct consequence of the illegal and invalid instructions of the Ministry. In its petition TCI has also sought a direction by the High Court to the Ministry not to interfere with the pricing mechanism in any manner. TCI also believes that the FSA system of distributing coal has an inbuilt risk of engendering corruption and has drawn strong parallels between the corruption related to the allocation of the 2G spectrum and selling FSA (Fuel Supply Agreement) coal below market prices.
TCI THREATENS TO SUE THE BOARD
In addition to its writ action in the High Court TCI has also threatened to sue the Board of Coal India for breach of fiduciary duties and abuse of minority shareholders. It alleges that the directors' continued failure to expedite ramp up of coal washing capacity and raising coal prices is further evidence of their unwilligness and inability to run Coal India to the best of shareholders' interests.
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