Indian fertiliser tycoons in Federal Court win
Pankaj Oswal is increasingly confident. Photo: Nic Ellis
TROUBLED Indian entrepreneurs Pankaj and Radhika Oswal are increasingly confident of reclaiming control of their fertiliser business after winning the right to appoint three directors to the board of its parent company, Burrup Holdings.
The conditional decision by the Supreme Court of Western Australia yesterday also places in doubt a $750 million Pilbara explosives plant that BHL had planned to commission in 2013.
Mr Oswal confirmed he and wife Radhika - who together own 65 per cent of BHL - would not support the technical ammonium nitrate (TAN) plant, which could affect the $20 billion of mining developments in the region.
The TAN project would have used ammonia from Burrup Fertilisers's adjacent plant, which is mostly owned by the Oswals, who do not support the project. BHL's other major shareholder, Norwegian-owned Yara International, has pushed for the project because it would own 65 per cent of the related company, Burrup Nitrate.
The Oswals are also contesting the right of ANZ Bank to appoint receivers to Burrup Fertilisers as it attempts to reclaim $900 million it says it is owed.
The Supreme Court action yesterday was brought by Mrs Oswal against Yara and claimed the right of shareholders to appoint directors to the board of BHL in December 2010.
''The judgment has upheld our rights as majority shareholders of BHL to control the board of BHL,'' Mr Oswal said.
''In this regard the argument of Yara that Radhika and I had no ability to appoint directors of any significant influence on the board has been rejected as 'commercially indigestible'.
''It is bad news for Yara as now there is no doubt that the TAN project will be shelved from our side, particularly as the proposal did not benefit any potential incoming shareholder.''
However, Yara remained confident that the Oswals would not be able to meet the court's preconditions for appointing nominee directors. ''The pair's ability to execute assumption deeds and exercise rights of appointment are clouded by the rights of ANZ and PPB over their shares,'' a company statement says.
Mr Oswal is considering suing Yara for what he said was a ''fanciful and unwarranted legal case designed to put us under pressure regarding our positions at Burrup Fertilisers''. He said success in the Yara case had boosted his confidence for parallel legal action by receivers appointed to Burrup Fertilisers.