As the proposed stake sale awaits approvals, Opposition leader Pinarayi Vijayan on July 4 wrote to SEBI seeking intervention into the move.

As the proposed stake sale awaits approvals, Opposition leader Pinarayi Vijayan on July 4 wrote to SEBI seeking intervention into the move.

As the proposed stake sale awaits approvals, Opposition leader Pinarayi Vijayan on July 4 wrote to SEBI seeking intervention into the move.

Adani Ports' $1.397 billion deal to divest its stake in its flagship Vizhinjam Port has become one of the major focal points of maritime news in India.

The deal that would see the Mediterranean Shipping Company (MSC) Group's subsidiary Termianl Investment Limited (TiL) obtain a 49 per cent stake in the Thiruvananthapuram-based transshipment port now faces a roadblock from the Kerala government, which has alleged that it was kept in the dark about the development.

The state government is now examining the proposal, which Adani Ports and Special Economic Zone (APSEZ) had earlier disclosed to SEBI, in which it had said that a "definitive agreement" had been signed.

Notably, it was only after the controversy broke out in the state government on July 1 that APSEZ rushed to submit the MSC stake proposal to the Ports Department Secretary and the Managing Director of Vizhinjam International Seaport Limited (VISL).

This is because APSEZ is the Kerala-owned port's operator and concessionaire in the Public-Private Partnership (PPP) agreement under a 40-year Design, Build, Finance, Operate and Transfer (DBFOT) model.

As a result, the Kerala government has the final say in whether Adani can divest more than 25 per cent of its stake in the fast-growing transshipment port.

With the proposal now under the lens of the state government, there is a great deal of interest in what hurdles lie before its approval by the Kerala government.

The proposal will first be vetted by the Law Department, after which it will be examined by a high-power committee headed by the Chief Secretary.

Based on this recommendations of this panel, the State Cabinet will decide whether to approve the stake sale or not.

After obtaining the state government's approval, there lies another hurdle: the Centre, which will have to make a number of decisions on the stake sale, especialy on matters related to foreign investment and security.

Despite the "definitive agreement" that Adani Ports and the MSC subsidiary had signed earlier, it is only after obtaining approvals from the Centre that a final Memorandum of Understanding (MoU) can be signed, which will clear the way for the divestment to occur.

In the meantime, Leader of Opposition in the Kerala Assembly, Pinarayi Vijayan—who first flagged issues with the stake sale—on Saturday wrote to SEBI seeking intervention into the move, alleging that it violated the concession agreement with the Kerala government.

Citing the need for transparent disclosures under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Vijayan alleged that there is a "well-planned and premeditated commercial strategy behind these developments", a PTI report said.

Dismissing claims of legality and commercial conspiracies at play, APSEZ CEO declared that the Vizhinjam Port would remain an "open-access port", and that the stake sale would not unfairly advantage MSC.

He also pointed out that MSC has been a part of India's maritime sector for several years and already has the required security clearances, as it operates at major Indian ports.

Notably, Vizhinjam would be the third major collaboration between APSEZ and MSC, following their joint ventures at the Mundra and Kamarajar ports.

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