Swan in court

Vol 15, PW 10 (17 Nov 11) News in Brief

Acting chief justice Bhaskar Bhattacharya of the Gujarat High Court has set November 30 for the final hearing in a Public Interest Litigation against GSPC’s controversial award of 49% in a 2100-MW power project at Pipavav to Mumbai-based Swan Energy.

“If the High Court decides against the allotment to Swan,” reports a legal source, “then GSPC and Swan can appeal; but if they lose the appeal, then GSPC must scrap the award.” Gujarat opposition Congress leader Shaktisinh Gohil filed the PIL on July 17, 2010, alleging the sale of GSPC’s stake was done without an open tender and that the Gujarat government undervalued its own shares, causing a loss to the state.

In Gujarat, it is common knowledge that the Dave and Merchant families that control Swan are close to the ruling BJP in Gandhinagar. A shareholder agreement signed on January 20, 2010 gave Swan 49% stake for Rs381cr ($75.61m); GSPC holds 34% and Gujarat Power Corporation holds 17%.