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New Delhi March 29 The Government has decided to go by the opinion of the Attorney-General on the residual stake sale issue of Balco.

The Attorney General has opined that the Government was not bound by the shareholder's agreement (SHA) to sell the residual 49 per cent stake to the strategic partners Sterlite Industries as had been decided during the NDA regime.

Sterlite has used its call option under the SHA in April 2004 to buy out the Government stake after which SBI Capital Markets had been appointed as the valuers. However, the valuation drew a lot of flack and the entire issue was eventually referred to the Group of Ministers (GoM).

"The Attorney General had opined that the provisions of the call option that was exercised by Balco under the shareholders' agreement and the valuation date under the agreement do not survive, being ultravires the Companies Act.

"Now the GoM has decided to go by the Attorney General's opinion and take that stand in the arbitration proceeding that is going on in the Delhi Court," officials said.

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