The Hindu Business Line : Centre to look into share sale by AP Govt

A LETTER from the Union Cabinet Secretariat has informed a group of shareholders of Andhra Pradesh Paper Mills Ltd (APPML) in Kolkata that the matter of sale by the Andhra Pradesh Government of the company's shares, allegedly at a loss to the exchequer, "is being taken up."

The letter, however, does not spell out the action that the Government proposes to take.

The letter is in response to a missive from a number of local shareholders, stating that a bid for the purchase of AP Paper shares at Rs 140 per share has been ignored, while another, in spite of the lower price that it was known to have quoted, has been accepted.

The letter from the Government is addressed to Mr R.K. Gupta, an advocate representing the shareholders, who had earlier sought to bring the matter to the notice of Mr K. Chandrasekhar Rao, Union Minister. The shareholders had also urged the authorities, including the securities regulator, to intervene in the matter.

AP Paper, it may be mentioned, was promoted by the Andhra Pradesh Government and Mr G.D. Somani in the mid-1960s, whose rights were later transferred to West Coast Paper, which in turn transferred its holding to Digvijay Investments Ltd (DIL), a subsidiary. In 2003, DIL acquired 30 lakh shares held by the Andhra Pradesh Government at a price of Rs 130.95 per share.

Local investors refer to an earlier note written by the Andhra Pradesh Government, reiterating that it had ceased to be a shareholder in the company in December 2003.

"The State Government and DIL were parties to an agreement which specified the sale process to be followed in the event of an intended sale of either party's shareholding in APPML and that process was successful in achieving Andhra Pradesh Government objectives for the sale," it was pointed out, adding that "alternative sale methods were not necessary and were not considered or pursued."

However, it was later indicated that DIL did not make an open offer for the company's shares under the relevant legislation. The AP Paper stock, incidentally, is being quoted at around Rs 100 on the bourses.

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