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TMI Blog2008 (12) TMI 852X X X X Extracts X X X X X X X X Extracts X X X X ..... rent Group as part of its disinvestment policy, is the subject matter of challenge in this writ petition filed in the public interest. 2. Petitioner claiming to be a share-holder of AEC and a social activist, has approached this Court by this public interest litigation, seeking a writ of certiorari to quash the Government Resolution dated 16.7.1997, deciding to disinvest the shares of Government of Gujarat in favour of Torrent Group, contending the same is arbitrary, illegal, violative of Article 14 of the Constitution of India and also in violation of breach of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. 3. Petitioner, who appeared in person, submitted that State Government favoured Torrent Group by parting its equity shares, that too without following the procedure laid down in disposing of the equity shares and in gross violation of the Rules and Regulations. Petitioner submitted that Government Resolution published through public announcement did not disclose any rationale in State Government dis investing its equity shares without inviting any competitive bidding or offer for sale through public auction. Petitioner pointed out that Government of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the working of AEC. Learned Advocate General submitted that AEC is a Public Limited Company, which generates and supplies power, especially to the industrial belts of Ahmedabad and it was highly necessary to extend a helping hand to AEC, so that it can generate large quantity of power to satisfy the needs of industrial and residential consumers at a reasonable cost. Government had great confidence in the Torrent Group, which is already a shareholder in AEC at the relevant point of time. It was felt that the company could be managed in a professional and efficient manner, if the equity shares are sold to Torrent Group of industries. Government of Gujarat was holding 16.51% of the total equity shares of AEC, and Gujarat State Investment Corporation, a fully owned company of Government of Gujarat was holding 12.38% of total equity shares of AEC. Government, after due deliberation took a policy decision to disinvest above equity stake of 28.89% of AEC in favour of Torrent Group. Government had noticed that Torrent Group was already having stake of 21.33% shares in AEC, and that while parting with shares no disequillibrium or disturbance within the major blocks of shareholders be creat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... illegal and the company has not done anything surreptitiously so as to cause loss of public revenue. Further, it was stated that all statutory procedures and regulations laid down by SEBI were scrupulously followed and whole attempt of the petitioner is only to tarnish the image of the company and therefore, the public interest litigation may not be entertained. 7. Mr. Sudhir Nanavati, learned Senior Counsel appearing for 10th respondent submitted that Ahmedabad Electricity Company has never been a Government company and it was started by Killick Nixon Group in 1913. Company was given term loan by the State Government and 20% of the term loan was converted into equity shares in 1989 at par. Prior to the conversion, State Government was holding only 0.5% shares approximately and by conversion, State Government got shares at Rs. 10/(at par) for which now it is getting Rs. 117/per share, even when this share was quoted at Rs. 55/in the share market. He also submitted that when 3rd respondent offered to purchase AEC shares at Rs. 117/per share, market price was hovering around Rs. 50 to Rs. 60 and after the offer was made, market price had touched Rs. 103/. It was stated that decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty company. Company generates and supplies power to a large area, especially to the industrial belts of Ahmedabad, which has power houses at Sabarmati and Vatva. AEC has to be managed in a professional manner so as to generate maximum quantity of power to meet with the needs of residential, agricultural and industrial consumers, and to supply uninterrupted power to them at a reasonable tariff. Government is naturally interested in the proper and efficient management and administration of AEC. Torrent Group company is a major group holding 21.35% of AEC equity stakes, besides financial institutions and State Government. There were three major blocks of shares when the Government took a policy decision to part with a fraction of its equity shares, of which one of the major shareholders was Torrent Group. Government was having 28.89% equity shares along with its company called "Gujarat State Investment Corporation". 33.92% equity shares was held by various financial institutions. 21.35% equity shares was held by Torrent Group industries. For proper and efficient management of AEC, it was found necessary that Government should create a situation which would cause least disturbance or d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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