The UK-based minority shareholder in Coal India, Children's Investment Fund (TCI), has approached Finance Minister P. Chidambaram to sort out its ongoing dispute with the public sector miner.

No stake sale

However, TCI is no mood to sell its stake in Coal India.

“He (Finance Minister) was keen to know on how we could resolve these matters.

“But, the Minister refrained from giving us any specific feedbacks,” said TCI partner Oscar Veldhuijzen.

“We feel that there is a greater understanding and willingness to increase shareholders’ returns through higher dividends or share buy backs and improved corporate governance,” Veldhuijzen told mediapersons here.

Court grants time

The Delhi High Court on Friday granted four weeks’ time to TCI to reply to Coal Ministry’s response on the former’s petition alleging Government’s undue interference in the businesses of Coal India. The matter would be next heard on May 9.

According to reports, the Coal Ministry in its response to the petition has accused TCI of “forum shopping.”

“The Petitioner (TCI) has resorted to forum shopping as is evident from the fact that apart from filing the instant petition, the petitioner has also filed a civil suit in the Calcutta High Court seeking substantially similar reliefs based on the same alleged facts,” according to news agencies reports quoting Coal Ministry’s reply to Delhi Court.

Mark Derbyshire, Partner at TCI Fund Management, said the investors received the response of Union of India on Tuesday. “We had insufficient time to respond to it. There is nothing in the response from Union of India that gave us any surprises. It is as we expected.”


Veldhuijzen indicated that currently TCI is not looking at exiting Coal India. The UK-investor holds 1.77 per cent stake in the miner as of November.

TCI bought less than one per cent when Coal India launched its initial public offer (IPO) in October 2010. Subsequently, it raised its stake to become the largest shareholder after Government. TCI has bought more shares after February 2012.

“Right, now the risk return is extremely attractive. There is very limited downside to the stock price. We think profits can actually quadruple if the right things were to be done from a pricing and washing point of view,” Veldhuijzen replied when asked if TCI would exit Coal India.

TCI reiterated that Coal India should re-price coal to market levels in order to help poor people of India instead of the rich.

“Why should Coal India subsidise to un-regulated industries (like steel, cement)?” Veldhuijzen asked.

(This article was published on December 7, 2012)
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