New Delhi: UK-based hedge fund TCI, the biggest foreign investor in Coal India (CIL), Friday asked directors of the coal major to take steps for the removal of their CMD in order to run the company efficiently in the wake of fuel supply dispute between the power giant NTPC and CIL.
"If the current CMD is not able to provide solutions to these problems, then it is incumbent on CIL's other directors to remove him from office and take appropriate steps to have him replaced with someone who is able to run the company efficiently," The Children's Investment Fund Management (TCI) said in a letter to CIL Directors Friday.
TCI has a minority stake in Coal India. It has been accusing the PSU of not protecting minority shareholders' interest and harming the company.
Commenting on power major's refusal to sign the Fuel Supply Agreement with CIL for alleged poor quality of coal, TCI said, "it is extremely bad management to allow such a key customer to become so greatly dissatisfied."
Raising questions on directors role, too, it said, "it is also indicative of how negligently you, as directors, are doing your jobs that CIL failed to roll out a comprehensive programme for coal washing" despite knowing that washing could fetch it international prices through quality product.
TCI has already initiated legal action against the PSU by filing a petition before the High Court, Kolkata.
Further, the body charged the directors of "very serious breach" of duties by not providing any assurance regarding the theft of good quality coal from its mines, raised by it".
It also said that it is a matter of concern that while CIL's major competitor Singareni Collieries Co Ltd (SCCL) is "selling comparable coal to power companies at a premium of 60 percent to CIL's equivalent FSA prices", why is it that CIL is unwilling to charge such a price for its FSA coal.
The hedge fund has sought a reply to the letter from directors within seven days.
First Published: Friday, April 05, 2013, 19:46