Kerala CM V.D. Satheesan has clarified that Adani Ports and Special Economic Zone (APSEZ) had sought prior approval from the state government before attempting to transfer its 49 per cent stake in the Vizhinjam Port.
This is the latest update on APSEZ's proposed stake sale to Terminal Investment Limited (TiL), the terminal arm of the Swiss shipping giant Mediterranean Shipping Company (MSC).
CM Satheesan had been responding to an unstarred question in the Assembly recently, and noted that the port operator had submitted the proposal in accordance with the provisions of its concession agreement with the Kerala government.
He added that an empowered committee headed by the Chief Secretary is evaluating the proposal with respect to the concession agreement.
This comes just months after Union Minister for Ports, Shipping and Waterways (MoPSW), Sarbananda Sonowal, notified in the Lok Sabha an update on the proposed stake sale.
He had said in his August 7 written reply to the Parliament that the Centre had not yet received Adani Ports' proposal, as that the state government was still evaluating it.
What was the issue about?
Adani Ports holds this 49 per cent stake in Adani Vizhinjam Ports Private Limited (AVPPL), its subsidiary and the concessionaire for the state-owned port under the Public Private Partnership (PPP) mode. It will be this stake that will be divested, should the $1.4 billion deal with MSC go through.
However, the news of the "definitive agreement" on June 30 made headlines because the sale of more than a 25 per cent stake in the port needs prior approval from its owner, the Kerala government.
The CM had claimed at the time that the Kerala government had not been informed of the deal, and had come to know about it from media reports.
The Opposition had also raised its voice, alleging a monopoly between Adani Ports and MSC, which happens to be one of Vizhinjam's top customers. Opposition leader Pinarayi Vijayan had also written to SEBI, urging it to intervene in the deal over alleged violations of the concession agreement.
When the Kerala government received the stake sale proposal, it went to the Law Department for vetting, after which it is now being examined by Chief Secretary-led panel.
Based on the recommendations of this panel, the State Cabinet will decide whether to approve the stake sale or not, after which it will head to the Centre, which will make decisions on matters such as foreign investment and security.
