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Private seaport owner Kakinada Seaports has moved Hyderabad High Court against PSU oil and gas giants GAIL and HPCL, alleging that it was deprived of the promised equity holding in the city gas distribution firm Bhagyanagar Gas.
Kakinada Seaports has accused GAIL and HPCL, which held 25% equity stake each in Bhagyanagar Gas, of managing to increase stakes to 44.98% each and shrinking the seaport's stake to 0.05% from a high of 50% by dishonouring promised stake.
The court has admitted the petition. "GAIL and HPCL had promised us 10% stake after other private investors were identified and 40% of our stake was diluted in their favour," Kakinada Seaports' chairman and managing director KV Rao told ET. "They (GAIL and HPCL) went ahead with allotment of shares in their favour in the last annual general meeting without honouring the promise of retaining 10% stake to us."
Rao said his company raised objections on the decision over allotment of shares that enabled the state-owned oil and gas giants to gain control over the city gas distribution firm and relegating Kakinada Seaports to a fringe player. "We told them that we were ready to invest proportionate monies to retain 10% stake as agreed upon originally but they went ahead with arbitrary decision on equity stakes."
Bhagyanagar Gas was incorporated in August 2003 for distribution of compressed natural gas (CNG) and piped natural gas (PNG) to domestic, commercial and industrial sectors. The company obtained authorisations to lay, build and operate city gas distribution projects in Hyderabad, Vijayawada and Kakinada.
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