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Hindustan Zinc CBI Investigation: Supreme Court orders CBI probe into Hindustan Zinc: Supreme Court orders CBI investigation in Hindustan Zinc case

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Hindustan Zinc CBI Investigation: Supreme Court orders CBI probe into Hindustan Zinc: Supreme Court orders CBI investigation in Hindustan Zinc case

Highlights

  • Government sold 26% stake in Hindustan Zinc in 2002
  • It was sold to Sterlite for Rs 445 crore.
  • Atal Bihari Vajpayee’s government was in the country at that time.
  • Supreme Court has ordered a CBI inquiry into the matter


New Delhi
In 2002, the government sold 26 per cent stake in Hindustan Zinc Ltd to Sterlite, a subsidiary of Vedanta Group, for Rs 445 crore. It is alleged that its original value was Rs 39,000 crore. Atal Bihari Vajpayee’s government was in the country at that time. The Supreme Court has ordered a CBI inquiry into the matter.

The court said that despite the alleged irregularities in the divestment in 2002, the preliminary inquiry was closed. The Supreme Court ordered the CBI to investigate the matter. The court said, ‘There is enough material for this. CBI is ordered to register the case regularly. The CBI will have to apprise the court of the progress made in the matter from time to time. The court also allowed the government to sell its remaining 29.5 per cent stake in Hindustan Zinc Ltd. In the year 2012, the UPA government had decided to sell it.

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what is the whole matter
The Center first sold 24.08 per cent stake in Hindustan Zinc in 1991-92 when Manmohan Singh was the finance minister. In April 2002, the government sold 26 per cent stake in the company to Stellite for Rs 445 crore. Sterlite had raised its stake to 46 per cent by buying 20 per cent stake from the open market. It then took 64.92 per cent stake in Hindustan Zinc by using two call options. In 2012, the central government decided to sell its 29.54 per cent stake in the company. In November 2013, the CBI started a preliminary inquiry in the case on the basis of suspected financial irregularities. But it was later closed.
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In 2014, the Central Public Sector Enterprises (CPSEs) filed an appeal in the Supreme Court. It claimed that when Hindustan Zinc was disinvested in 2002, its stock was undervalued. In 2016, the Supreme Court had stayed the government’s sale of stake in Hindustan Zinc. A CAG report in 2006 indicated that Asset Valuers and Global Advisors had undervalued the assets.

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