Petroleum ministry strongly supported the proposal of 26 per cent government holding in Hindustan Petroleum Corporation in the post disinvestment era to prevent new management from stripping or re-selling of company's assets to third party.
Rejecting the arguments raised by ministry of disinvestment in an inter-ministerial note, the ministry said if the government holding is below the 26 per cent level as suggested by disinvestment ministry, the new management can change provisions of memorandum of association of the company, change share capital of the company and sell existing assets of the company.
''At 26 per cent, the Government can have the statutory backing to see that no decision is taken by the new management which can have destabilizing effect on the existing business relationship between HPCL and other public sector oil companies. This also minimizes the occurrence of deadlock in the decision-making in the Board.'' the ministry pointed out.