The Supreme Court of India has asked the national government to not proceed with the proposed sale of a 29.54% stake in Hindustan Zinc.
The decision is expected to further delay majority owner Vedanta Resources bid to take complete control of the zinc manufacturer.
In 2014, a stake sale in Hindustan Zinc, which was approved by the union cabinet, was opposed by a group of central government officers who approached the court to stop the divestment without securing consent from Parliament.
Two years ago, Vedanta offered around $2.94bn to acquire the stake held by the government in Hindustan Zinc.
The National Confederation of Officers’ Association and an employees union, which is against the divestment, filed a petition challenging the previous sale of 26%, when assets were sold to Vedanta for Rs4,450m in 2002.
Chief justice of India TS Thakur questioned the intention behind the proposed divestment and asked the government why it was in a hurry to sell the remaining stake.
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Attorney-general Mukul Rohtagi told the court that the government was no longer interested in the business and it is not a company owned by the government.
Hindustan Zinc was incorporated from the erstwhile Metal Corporation of India on 10 January 1966. It was put up for sale in 2001 as part of the government’s disinvestment programme.
In April 2002, the company was acquired by Sterlite Opportunities and Ventures (SOVL), which is now called Vedanta.
Following the acquisition, SOVL’s stake in Hindustan Zinc increased to 64.92% and the government’s stake stands at 29.54%.
Hindustan Zinc has mines in Agucha, Sindesar Khurd, Zawar, Rajpura Dariba, and Kayad, and smelters in Dariba, Chanderiya and Debari, all in the Indian state of Rajasthan.
Image: Hindustan Zinc’s Chanderiya Smelting Complex in Rajasthan. Photo: © Hindustan Zinc Ltd.