Bhubaneswar: The Odisha government on Friday has approved the
proposal to dissolution of the Odisha Mining Corporation-Sainik Mining and
allied services Joint venture Company. The state steel and mines department has
taken this decision after getting the opinion of the law department.
The state law department in its opinion had said that ” The JV
Company was constituted on the basis of the agreement for operating the coal
block. When the agreement has been terminated there is no reason for
continuance of the JV Company.”
In September 27 last year the state government has scrapped the
deal between OMC and SMASL after the after the
state controlled miner faced a barrage of criticism for conceding controlling
stake in the joint venture to the private player.
The state government had took this decision after
a public interest litigation (PIL) was filed in the Supreme Court on grounds of blatant violation of Coal Mines
(Nationalization) Act-1973 by allowing the private player to have controlling
stake in a coal mine allocated to a PSU.
OMC had entered into a joint venture (JV) with
Delhi-based Sainik Mining & Allied Services Ltd (SMASL) for developing the Utkal-D coal block allotted to OMC.
While SMASL had 74 per cent stake in the JV, the state owned mining PSU held 26
per cent. The equity pattern had drawn flak from the Ministry of Coal which had
held OMC guilty of violating Coal Mines (Nationalization) Act, 1973 by
conceding controlling stake to a private player for developing a coal block
allotted to a state PSU. The ministry had issued a show cause notice to OMC in
July 2010, urging the PSU to raise its stake in the JV to at least 51 per cent.
In addition to this, the ministry had also advised OMC to suitably modify the
Memorandum and Articles of Association of the JV Company.
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