Cousins spar over sale

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A day after being questioned by the CBI regarding the sale of Nava Bharat Power, its original owners started a blame game on Wednesday, accusing each other of being responsible for the decision to sell the stakes to the Essar Group.

In a statement issued to the Bombay Stock Exchange, Nava Bharat Ventures led by P. Trivikrama Prasad tried to deflect the blame to its joint-venture partner Malaxmi Group for the sale. “On account of the sale of stake by the Malaxmi Group to Essar Power in total disregard of the interests of the other investor (Nava Bharat Group), Nava Bharat Group subsidiary and the managing director of Nava Bharat Ventures had no other option but to exit from Nava Bharat Power,” the statement read.

Chairman of Malaxmi Group Y. Harish Chandra Prasad, on the other hand, blamed his cousin Mr Trivikrama Prasad for deciding to exit from Nava Bharat Power. “It was I who spent money for bank guarantees etc., for Nava Bharat Power. Since we were not supposed to exit from Nava Bharat Power without each other's permission, I sold a partial stake in my holding company, Malaxmi Energy Ventures, to Essar Power only to recover the money that I had invested,” Mr H.C. Prasad said.

He added that the sale of Nava Bharat Power would have been impossible without Nava Bharat Ventures’ agreement as Mr Trivikrama Prasad had a casting vote, which was important for any board resolution. Nava Bharat Ventures, he claimed, had actually approached Essar for the sale of 100 per cent stake. “Out of the sale proceeds of Nava Bharat Power, I had just got Rs 62.17 crore. After deducting expenditure, I gained only Rs 27 crore from the deal, whereas Nava Bharat Vent-ures got over Rs 160 crore.”

In a separate statement, Essar Power, which had acquired Nava Bharat Power for around Rs 230 crore, said that the offer for sale had been sent by its erstwhile promoters through a prominent financial institution.