According to Mr S Vijay Kumar mines secretary of India, India has no obligation to sell its 49% stake in Bharat Aluminium Co to parent Sterlite Industries (India) Ltd.

The three member panel formed by Sterlite and the government ruled that the state is free to hold the shares for as long it wants and choose a buyer, Kumar said today in a phone interview in New Delhi.

In a 2:1 decision, the panel struck down Sterlite Industries call option to acquire the balance 49% stake as invalid. Call option is an agreement that gives the buyer a right to buy some part of an asset at a specified price within a specified time frame.
According to Mr BL Bagra finance director of National Aluminium Ltd and the government’s valuation expert in the case, Sterlite, India’s largest copper producer, bought 51% of Bharat Aluminium in 2001, with an option to buy the remaining stake at a price decided by an expert panel three years later.

He said that the government rejected Sterlite’s claim on the remaining stake in 2004 after aluminum prices rose, boosting the valuation of its holding.

Mr Vijay Kumar said that Sterlite is free to appeal against the panel’s decision to the high court.

(Sourced from Bloomberg)