NEW DELHI: The Supreme Court on Tuesday suggested that the government seek Parliament’s approval to sell its remaining stake in Hindustan Zinc Ltd, even as it ordered status quo in the matter.
The court’s ruling came on a petition by the National Confederation of Officers, which challenged the second round of stake sale by what it said bypassing Parliament. During 2001-03, the Vajpayee government sold a majority stake in HZL to the Vedanta Group. As of end-September 2015, promoters held 64.92% of HZL.
The sale of its remaining 29% stake in HZL would help the government reduce its budget deficit, and likely allow Vedanta to increase its control over the miner.
Under the Metal Corporation Nationalisation and Miscellaneous Provisions Act, 1976, Parliament approval is needed to make changes to the nature and character of HZL. While the government had been mulling amendments to the Act, there had been opinions that such changes weren’t required.
On Tuesday, Attorney General Mukul Rohatgi said no parliamentary approval was required for the sale as divestment was a policy matter.
A bench comprising Chief Justice TS Thakur, and Justices AK Sikri and R Banumathi asked why the government was in a hurry to sell its shares. “What are the compulsions for disinvestments? You can’t do it without amending the law,” the CJI said. Rohatgi said the government did not want to be in the mining business. “If I have to sell, why should I not,” he asked. In that case, the CJI said, “take parliamentary sanction for your disinvestments.”