Intensifying it’s A$3.5 billion legal battle, Perdaman has served notices to Lanco Infratech’s billionaire chairman Mr Madhusudhan Rao and top executive Mr Prasad Kandimalla, a move that is likely to drag both of them directly into court proceedings in Australia.

Multinational Perdaman Industries has slapped an A$3.5 billion (about Rs 16,600 crore) lawsuit in the Supreme Court of Western Australia, alleging that Lanco is not complying with a 25 year-long coal supply pact for its upcoming Collie urea plant in Western Australia.

Mr Prasad Kandimalla, CEO, who also heads Business Development in the power and infrastructure verticals of Lanco Infratech, said that Perdaman has issued notices to him and company’s executive chairman Mr L Madhusudhan Rao.

“They (Perdaman) have a right to issue notice to me or my chairman. They do not need my permission for that. But getting approved (in court) is a big deal,” Mr Kandimalla told PTI over phone from Australia.

These notices may make both Mr Rao and Mr Kandimalla personally liable for the damages claimed by Perdaman related to non-compliance with the coal-supply pact. Mr Rao is a leading industrialist and last year, Forbes magazine ranked him as 29th richest Indian with a net worth of $2.3 billion.

Noting that paper work is going on, Mr Kandimalla said the hearing of the case may be fixed by the end of September.

Perdaman had entered into a coal-supply agreement with Griffin Coal, which was acquired by Lanco for A$730 million in March.

According to Australia-based Perdaman - which is currently focused on urea production - Lanco is not complying with the coal supply agreement, worth billions of American dollars. The lawsuit was filed by Perdaman Chemicals and Fertilisers, whose parent company is Perdaman Industries.

Lanco had termed the lawsuit as baseless. “Lanco has not terminated the coal supply agreement. We are ready to comply with the pact, which is in place,” the firm had said in June.

The coal supply - of about 2.7 million tonnes per annum - is to start in 2015, when the urea plant project is expected to achieve financial closure, Lanco earlier said.

Griffin Coal mine has a resource base of over 1 billion tonne and the referred contract with Perdaman is approximately for 2.75 million tonne per annum.

On June 29, Perdaman again moved the court against Lanco seeking a restraint on the Indian entity from mortgaging of Griffin Coal in the future.

“We requested Griffin Coal and Lanco Infratech to produce the documents - which includes negative pledge documents and financial documents,” Perdaman Chemicals and Fertilisers Pty Ltd’s Director (Corporate), Mr Andreas Walewski had said last month.

Related Topics
comment COMMENT NOW