TCI drags CIL to court over pricing
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The Children's Investment Fund Management (TCI) on Friday took Coal India (CIL) to court for underpricing coal leading to crores of losses in revenue. The lawsuit, filed in the Calcutta High Court, made the Government of India also a party for its "improper exertion of pressure on the company as a majority shareholder". The government holds 90 per cent in the miner while TCI holds a minority stake of 1.5 per cent.
In a statement, TCI said the lawsuit was filed against the directors of CIL for breach of their fiduciary duties and for failing to perform their functions with adequate care and skill.
TCI has estimated that by the end of FY13, CIL would have lost over Rs 8,700 crore in pre-tax profits simply for reversing the price increase of December 31, 2011. It demanded that CIL increase the fuel supply agreement price of coal and bring it to international market levels. But since CIL did not do so, it would have cost the company Rs 2,15,250 crore in pre-tax profits since it got listed in 2010, the hedge fund has calculated.
Around 90 per cent of such profits could have flowed to the Indian economy in the form of dividends and the sum is enough to fund free electricity for all Indian households, TCI said.
TCI has been persuading the coal ministry for three months to increase the price of coal and to supply 100 per cent washed coal to reduce pollution.