TEAM HERALD
PANJIM: The Rs 1750 crore takeover of the mining assets of VS Dempo and Company Private Limited by the Vedanta controlled Sesa Goa Ltd has been declared by the Shah Commission as a “facade of compliance of law, a subterfuge and an attempt by a private company to secure unjustifiable enrichment. The entire transaction is smacked of malafides and would defeat constitutional objectives”. The Commission used the words of the Apex Court in an earlier judgement, in a case along similar lines (according to the Commission) to state that, the excavation of all minerals by Sesa (as Sesa Sterlite Limited) is in contravention of Rule 37 of the Mineral Concession Rules 1960, which deals with the transfer of mining leases. (page 300)
Explaining further the Commission stated (page 305) that the Registrar of Companies has issued a certificate dated 19/11/2010 stating that VS Dempo and Company Private Limited was changed to VS Dempo & Company Limited and another stating that VS Dempo & Company Limited was changed to Sesa Resources Limited. The Commission found that this was done without Government approval and hence prima facie in violation of Rule 37.
The Sesa group argued that as per the share purchase agreement Sesa Goa Limited has acquired all the outstanding common shares of VS Dempo Pvt Ltd and hence, neither factually nor legally attracts provisions of Rule 37 of the MCR Rules 1960. The Commission has rejected this argument by stating (page 297). “There is no question of change of mere name but it would establish the company is transferred to another legal entity-a juristic person. This would not amount to a mere transfer of shares to contend that there was a mere change of name. It is an illusion to get out from the rigour of the law.” The Shah Commission has concluded that the contention of Sesa, that there was only a mere change of name “requires to be rejected”.
The Commission has contended that the stake in Vedanta by non-Indians may have bearing on the legality of the transfer the lease hold interest which has happened with the sale. Vedanta’s holding in Sesa Goa is more than 51%, through three 100% direct subsidiaries. Acquisition of lease hold rights over mining areas either in Goa or anywhere else in India by the companies having non-Indian directors is illegal under Section 5 (a) of the MMDR Act 1957. Transfer of lease hold interest is additional illegalities.”
